LABOUR MARKET PROFILE

2016 and

LO/FTF Council’s Analytical Unit Copenhagen, Denmark

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

PREFACE The LO/FTF Council is the Danish council for international news sources (e.g. The Economist, the British international development co-operation. It was Broadcasting Corporation (BBC), LabourStart, The established, under a slightly different name, in 1987 by Guardian, etc.) together with local sources such as trade the two largest Danish confederations, the Danish unions centers, NGOs, national news, the LO/FTF Federation of Trade Unions (LO) and the Danish Council’s Sub-Regional Office, among others. Confederation of Salaried Employees and Civil Servants (FTF). The organization activities are related This report also collects references from several to: i) to support democratic development of the trade indexes, e.g. the Global Rights Index, the Doing union movements in Africa, Middle East, Asia and Latin Business Index, the Governance Indicators, and the America; and ii) to contribute to democratic Human Development Index. The indexes’ methodologies development in the societies in which the unions operate. and the data quality can be followed by the sources websites. The LO/FTF Council presents this Labour Market Profile as a yearly updated report that provides an overview Most statistical data of trade union membership is of the labour market's situation. gathered through collaboration with trade centers and research. Notwithstanding, the measurements of trend This country profile presents the recent main of trade union membership, Collective Bargaining developments and is not an in-depth analysis. Agreements (CBAs), women’s trade union membership Nevertheless, it shows a wide range of data in a and occupational health and safety (OHS) committees reader-friendly style. Certain key findings of this report are a challenge. The used data of these can be found on the Executive Summary. abovementioned indicators should be interpreted with some reservations. The report is divided in 11 thematic sections, which includes trade unions, employers’ organizations, tripartite structures, national labour legislation, ACKNOWLEDGMENT violations of trade union rights, working conditions, This Labour Market Profile is prepared by the LO/FTF situation of the workforce (with subsections such as Council’s Analytical Unit in Copenhagen with support unemployment, sectoral employment, migration, from our Sub-Region Office in Tanzania as well as the informal economy, child labour, gender, and youth), Trade Unions Congress of Tanzania (TUCTA) and the education (with subsection vocational training), social Zanzibar Trade Union Congress (ZATUC) in terms of protection, general economic performance, and trade. data collection of trade union membership. Additionally, the reader finds an Appendix with a list of the ratified ILO Conventions and an updated status All other labour market profiles of the countries where of trade unions in Tanzania in terms of members and LO/FTF Council operates are available at our website: CBAs. http://www.ulandssekretariatet.dk/content/landeanaly

ser As indicated, the report is driven by statistical data selection from international databanks, surveys and Should you have questions about the profiles you can reports (e.g. the International Labour Organization contact Kasper Andersen ([email protected]), Manager of (ILO), the International Trade Union Confederation the Analytical Unit. (ITUC), the World Bank, the U.S. Department of State’s

Annual Country Reports on Human Rights Practices, Cover Photo: Carsten Snejbjerg WageIndicator Foundation, the Africa Labour Research

& Educational Institute (ALREI), etc.) as well as national Design and layout: Adriana Romero statistical institutions and ministries, and others. Moreover, narrative inputs are collected from

Tanzania & Zanzibar 2016 Page ii

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Tanzania & Zanzibar

Labour Market Profile EXECUTIVE SUMMARY

he United Republic of Tanzania has experienced a side, the changes in the industry sector is a step towards T rapid economic growth during the last decade a more economic transformation On the negative side, followed by a steady increasing labour productivity. that latter sector is not offering enough new jobs and a The number of working poor has dropped fast; a majority find their possibilities in the service sector with middle-class is on a rise and with an improving equality a lower labour productivity. in terms of the income distribution. The volatile inflation in Tanzania has affected the real wages purchasing Changes are also demonstrated by an internal power, though. In additiion, the country continues being migration from rural to urban areas in the country. This far below the sub-Saharan Africa average in terms of is driven by by the youth that is seeking for better jobs. the Gross Domestic Product (GDP) per capita in the Also child labour remains very acute. Gender-based purchasing power parity (PPP). It remains complicated discriminations in terms of wages and protections in doing business, especially trading across borders, employment are present. The education system has getting credit and paying taxes. been hard affected by resource shortages during recent years and the enrolment in schools on all levels The government in Tanzania mainland implemented five experienced drops. The membership of social protection labour market related legislations in 2015 along with shemes have increased fast, but remain with very low one new act in Zanzaniar, but none in 2016. The national coverages. International Trade Union Confederation (ITUC) has various observations with legislations that affect Tanzania mainland negatively the labour markets environment. Two key The growth of trade union membership in Tanzania points are that the state has lack of resources to mainland were on a fast increase on absolute terms implement the labour market regulations in practice in during the last decade. This influx has mainly been the formal sector and indirectly not covering a vast related to a growing number of wage & salaried majority (85 percent) of the labour force that operate workers. In recent years, the total membership’s in the informal economy. It has also been noted that intensification has been stalled, though. Likewise the workers are confronting regular violations of trade coverage of collective bargaining agreements (CBAs) union rights. also increased but lost its tempo. These negative impacts have been related to financial constraints as The labour force employment rate fell during the last well as challenges in the education system, among decade, especially among the youth. More and more others. people were instead inactive on the labour market. Unemployment is not a critical issue in Tanzania, but is Zanzibar more affected by skills mismatch between job The trade union movement in Zanzibar had an influx of requirements and qualifications due to a high incidence new members due to an improved social dialogue with of under-education. the government and employers’ organizations as well

as creating possibilities of affiliated organized workers The employment in the agricultural sector has been from the informal economy. Despite these fallen significantly, entering into the service sector and improvements, organizational reforms in 2015 affected slightly also in the industry sector. This is reflected in a hard the membership that fell by 11 percent in the considerable drop of own-account workers that instead period from 2015 to 2016 (September). On the became contributing family workers or wage & positive side, social security schemes have opened up salaried workers. These changes have been illustrated for workers from the informal economy. by an increasing GDP growth in the industry sector while the agricultural sector has more or less been flat and the service sector was dwindling. On the positive

Tanzania and Zanzibar 2016 Page iii

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

COUNTRY MAP

Source: The CIA World Factbook

Tanzania and Zanzibar 2016 Page iv

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

TABLE OF CONTENTS Preface ...... ii Acknowledgment ...... ii Executive Summary ...... iii Country Map ...... iv Trade Unions ...... 1 Tanzania, mainland ...... 1 Zanzibar ...... 2 Employers’ Organisations ...... 3 Tanzania, mainland ...... 3 Zanzibar ...... 4 Central Tripartite Structures ...... 4 Tanzania, mainland ...... 4 Zanzibar ...... 6 National Labour Legislation ...... 6 Tanzania, mainland ...... 7 Zanzibar ...... 7 Observations on the labour legislation ...... 7 Ratified ILO Conventions ...... 8 TRADE UNION RIGHTS VIOLATIONS ...... 8 Working Conditions ...... 9 Workforce ...... 10 Unemployment ...... 12 Sectoral Employment ...... 13 Migration ...... 15 Informal Economy ...... 15 Child Labour ...... 16 Gender ...... 17 Youth...... 18 Education ...... 19 Vocational training ...... 20 Social Protection ...... 20 Tanzania, mainland ...... 20 Zanzibar ...... 22 Economic Performance ...... 22 Trade ...... 25 Trade Agreements ...... 25 Export Processing Zones (EPZ) ...... 26 Appendix: Additional Data ...... 28 Status of Tanzania’s Ratified ILO Conventions ...... 28 Status of Trade Unions in Tanzania, 2016 ...... 29 Trade Union Centre and affiliates in Zanzibar, 2016 ...... 30 References ...... 31

Tanzania and Zanzibar 2016 Page v

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Tables Table 1: Status of trade unionism in Tanzania mainland, 2016 (est.)...... 1 Table 2: Paid employees with trade unions or employees associations, 2014 ...... 1 Table 3: Status of trade unionism in Zanzibar, 2016 ...... 2 Table 4: Membership of Association of Tanzania Employers (ATE), 2008 ...... 3 Table 5: Number of cases in Tanzania Commission for Meditation and Arbitration, 2013-2015...... 4 Table 6: Status of Collective Bargaining Agreements (CBAs) in Tanzania, 2016 ...... 5 Table 7: Status of Collective Bargaining Agreements in Zanzibar, 2016 ...... 6 Table 8: Status of the national labour, social security and human rights related legislations in Tanzania ...... 7 Table 9: Global Rights Index, Tanzania ranking, 2014-2016 ...... 8 Table 10: Wages and earnings Monthly average and legal minimum wages ...... 9 Table 11: Working Conditions in Tanzania ...... 10 Table 12: Employment-to-population ratio, Age and Sexes distribution, 2016 ...... 10 Table 13: Inactivity rate in Tanzania, 2016, % ...... 11 Table 14: Skills mismatch between job requirements and qualifications in Tanzania, 2013 ...... 11 Table 15: Unemployment in Tanzania, 2016 ...... 12 Table 16 : Employed persons and GDP share per sector, 2014 ...... 13 Table 17: Key Migration Facts in Tanzania ...... 15 Table 18: Employment in the informal economy in Tanzania ...... 16 Table 19: Proportion of households with informal sector activities, 2001-2014 ...... 16 Table 20: Working children Proportion of all children, age 5-17 years ...... 17 Table 21 : Highest level of schooling attained ...... 19 Table 22: Status of Vocational Training in Tanzania, 2013 ...... 20 Table 23: Public spending and coverage on social protection schemes in Tanzania, 2010, % ...... 21 Table 24: Pension Schemes: Benefits, Coverage and Contributions, 2010, % ...... 21 Table 25: Key Economic Facts in Tanzania, 2015 ...... 22 Table 26: Ease of Doing Business in Tanzania ...... 24 Table 27: Tanzania's Governance Indicators, 2009-2014 ...... 24 Table 28: Trade and Foreign Direct Investment in Tanzania, 2015 ...... 25 Table 29: Status of Tanzania’s Ratified ILO Conventions, 2016 ...... 28 Table 30: Status of Trade Unions in Tanzania, 2016 ...... 29 Table 31: Trade Union Centre and affiliates in Zanzibar, 2016 ...... 30

Figures Figure 1: Trend of number of members in TUCTA and the trade union density, 2008-2016 ...... 1 Figure 2: TUCTA membership covered by Collective Bargaining Agreements (CBA), 2008-2016 ...... 5 Figure 3: Minimum wage trend in Tanzania, 2000-2016 ...... 10 Figure 4: Labour force employment rate, 2007-2016, % ...... 11 Figure 5: Inactivity rate trend in Tanzania, 2007-2016, Sexes, % ...... 11 Figure 6: Labour productivity, 2007-2016 ...... 12 Figure 7: Unemployment rate trend in Tanzania and Eastern Africa, 2007-2016 ...... 12 Figure 8: Employment by aggregate sector in Tanzania, 2001-2014 ...... 14 Figure 9: Sector Share in Tanzania, 2000-2015, % of GDP ...... 14 Figure 10: Status of employment in Tanzania, % ...... 14 Figure 11 : Distribution of enterprises by size in Tanzania, 2011 ...... 14 Figure 12: Employment in the informal economy ...... 16 Figure 13: Labour force participation rate, sexes, % ...... 17 Figure 14: Women in Management and Ownership, 2013 ...... 18 Figure 15: Youth unemployment rate, 2007-2016, sexes, % ...... 18 Figure 16: School Levels and Enrolment ...... 19 Figure 17: Ratio of vocational student to all pupils in secondary education ...... 20 Figure 18: Total health-care expenditure not financed by private household's out-of-pocket payments ...... 21 Figure 19: GDP per capita growth, 2006-2015, % ...... 22 Figure 20: GDP per capita (PPP) growth, Current US$; and Gini Index ...... 23 Figure 21: Working poor, 2000-2012, % ...... 23 Figure 22: Middle-class growth in Tanzania and the sub-Saharan Africa, 2000-2012 ...... 23 Figure 23: Inflation trend, 2006-2015, % ...... 23 Figure 24: Gross Fixed Capital Formation, 2006-2015, % of GDP ...... 24 Figure 25: Export, Import and Foreign Direct Investment (FDI) trends ...... 25 Figure 26: Tanzania's main products share of exports, 2014 ...... 25 Figure 27: Tanzania's main export markets, 2015 ...... 25 Figure 28: Number of Zone Developers and Operators since established of EPZA, 2006-2010 ...... 26

Tanzania and Zanzibar 2016 Page vi

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

TRADE UNIONS Tanzania, mainland A national survey from 2014 showed that around one- There are 29 trade unions in Tanzania mainland; one quarter (27 percent) of paid employees are members was deregistered and another three trade unions are in of trade unions or employees associations. This the process of being deregistered. The trade union diverges slightly from the above calculation of trade movement covers 588,000 members. Two out of five union member share of labour salaried workers due to (40 percent) are women. The trade union density was the including of employees associations. Based on this estimated at 2.5 percent of the total labour force and broader interpretation of the trade union density, the at 19 percent of the wage and salaried workers (Table central and local government and parastatal 1). Other data show that the number of women in trade organizations have a quite high trade union density at union leadership increased from 435 in 2009 to 461 in 81 percent and 63 percent, respectively. It is interesting 2013 in the Trade Unions Congress of Tanzania (TUCTA) that women have a higher density (29 percent) than which equals a growth at 5.6 percent. men (26 percent). The sector with the smallest proportion is private sector (agriculture) (1.1 percent) Table 1: Status of trade unionism in Tanzania mainland, (see more on Table 2). 2016 (est.) Number of trade unions 29 Table 2: Paid employees with trade unions or employees associations, 2014 Both Due (median) N/A Sector Men Women sexes Members of trade unions 587,918 Central and local Women members of trade unions 77 % 87 % 81 % 40 % government (TUCTA) Parastatal organizations 67 % 44 % 63 % Trade union member share of labour 2.5 % Private sector (agriculture) 1.2 % 0.8 % 1.1 % force Trade union member share of wage Private informal sector 2.7 % 0.4 % 1.6 % 19 % Private sector (non- and salaried workers (2013) 17 % 12 % 16 % Members of affiliated trade unions agriculture) 17,865 from the informal economy Household duties 32 % 0.0 % 27 % Source: EATUC & EAEO Baseline Study on Social Dialogue within the Total 26 % 29 % 27 % East Africa Community 2016; TUCTA; and estimated based on Key Note: The percentages are from Tanzania Mainland. Indicators of the Labour Market (KILM), 9th Edition. Source: The 2014 Integrated Labour Force Survey (ILFS).

The number of members in trade unions grew by 46 Overall, private sectors have smaller proportion of percent from 2008 to 2016; however, only by 0.3 members in trade union than public sectors. This percent from 2012 to 2016. Estimations suggest that indicates that paid employees in private sectors have a the trade union density increased among the total low bargaining power with their employers. employment while it stayed flat among wage & salaried workers (Figure 1; see also Figure 10). The Trade Unions Congress of Tanzania (TUCTA) The sole national trade union federation in Tanzania is Figure 1: Trend of number of members in TUCTA and the TUCTA. It was established in 2001 under the Trade trade union density, 2008-2016 Unions Act of 1998. There is a 28 percent 700000 25% representation of women in the Congress; and regional 600000 19% 19% 20% meetings, making them slightly less than the targeted 500000 30 percent. 400000 15% 300000 10% TUCTA maintains strong ties with the government and 200000 has regular meetings with many other state institutions 3,0% 5% 100000 2,4% for discussion on issues related to the labour market. This organization’s Congress covers 390 members, the 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Council with 190 members, Executive Trade union density (total employment) (est.) Committee with 47 members, Executive Board with 15 Trade union density (wage and salaried workers) members. The organization is affiliated to the Number of members in TUCTA affiliated unions Source: TUCTA, performance Indicators 2008-2013; TUCTA Narrative International Trade Union Confederation (ITUC). Table Report 2015; EATUC & EAEO, Baseline Study on Social Dialogue within 30 shows details of the trade union movement’s East Africa Community, 2016.

Tanzania and Zanzibar 2016 Page 1

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

membership, number of Collective Bargaining equally important to note, that TUCTA faces challenges Agreements, and number of Occupational Health and and competition from new and fragmented unions. Safety Committees at workplaces.

One third of TUCTA’s total membership is organized by Zanzibar the Tanzania Teacher Union (TTU), which is one of the Zanzibar’s labour concerns have historically been strongest trade unions in Tanzania. TTU, together with neglected when it comes to constitutional matters. The the trade unions for government workers (TUGHE) and Zanzibar House of Representatives was compelled to local government workers (TALGWU), represent more enact the Zanzibar Trade Union Act of 2001, which than 50 percent of the total TUCTA membership (see allowed registration of trade unions in Zanzibar. more on Appendix Table 30). Subsequently, the national trade union centre - Zanzibar Trade Union Congress (ZATUC) - was TUCTA has had regular consultations with the president established in 2003. The ITUC affiliates the Zanzibar and officials as well as the employers’ association, the Trade Union Congress (ZATUC). Association of Tanzania Employers (ATE), on labour The labour law requires a union with 50 or more issues. Meetings in tripartite institutions such as the members to be registered and sets literacy standards Institution Labour, Economic and Social Council (LESCO) for trade union officers. Not to mention the law have been seldom, though (see also the section: Central provides considerable powers of the registrar to restrict Tripartite Structures). registration by setting forth criteria for determining whether an organization’s constitution contains suitable TUCTA conducted advocacy campaigns through provisions to protect its members’ interests.1 national media on topics like domestic workers, gender labour rights and labour rights compliance, workman’s The trade union movement covers nine trade unions. In compensation fund, informal economy contributions to ZATUC is now recruiting members who are paying social security schemes, among others. TUCTA managed contributions to their unions and those who are not to pressurize government to allow workers from the paying at all are not considered as members any more. informal economy to pay contributions to - and benefit Consequently basing on such criteria, ZATUC from - social security schemes. On the same token, membership has been registered from 21,000 in 2015 TUCTA has supported regional trainers’ network through to 19,000 as of September 2016, i.e. 11 percent training of (master) trainers, researchers and regional decrease. Around 40 percent are women. The trade trade union representatives. union density was estimated at 2.4 percent as a share of the total workforce in Zanzibar (Table 3). The TUCTA strategic plan 2012-2016 continues to promote attention to strengthen the financial situation of Table 3: Status of trade unionism in Zanzibar, 2016 the organization. The management of the real estate Number of trade unions 9 owned by the organization has been improved and a business plan has been developed for the revamping of Due (median) 4,000 the Mbeya Labour College. Furthermore, a membership Members of trade unions 19,000 database is under development. Also a draft policy has Women members of trade unions 7,39 7 been developed on how TUCTA and affiliated unions Trade union members share of 2.4 % can engage and organize in the informal sector. workforce Members of affiliated trade unions 896 The organization is recognized as an institutional player from the informal economy in the labour market. However, TUCTA is faced with Labour force (2012 )2 776,176 serious financial constraints due to lack of income from Source: ZATUC; LO/FTF Council research; and ILO, Key Indicators of fees from affiliated unions, real estates, and losing the Labour Market (KILM), 9th Edition. external donor support, among others. TUCTA is working on financial recovery plans. Internal conflicts The Zanzibar Trade Union Congress (ZATUC) have also arisen because affiliated unions oppose ZATUC continues its positive development and is TUCTA’s constitutional right to direct check-off from the continuously consulted by the government. Among source (5 percent of member fees paid to unions). In others, trade union leaders are placed centrally in addition, TUCTA hardly pay salaries to the secretariat, standing committees in the House of Representatives to and most activities have been donor funded. It is lobby tabled Bills. For instance, ZATUC participated in formulating the new regulation on public service to

Tanzania and Zanzibar 2016 Page 2

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

establish committee of negotiating machinery for public Regionally, ZATU is active in the federation for East sector employees. African Teachers’ Unions (FEATU) that recently gained legal registration in Tanzania and is in the process to The trade union movement in Zanzibar is under reforms. finalize establishment of permanent office in Arusha Internally ZATUC is merging resources together to make and receiving official observer status in the East Africa fewer and stronger unions. So far it has managed to Community (EAC) in line with the East African Trade reduce the number of affiliates from eleven to nine. The Union Confederation (EATUC) (only on issues pertaining new Zanzibar Public Sector Workers Union (ZAPSWU) teachers’ rights and education matters). is in place, while another merger process for private sector unions has been initiated. It is without the Table 31 shows details of the trade union movement’s Zanzibar Teachers’ Union (ZATU). In addition, TUICO-Z membership, number of Collective Bargaining and ZAFICOWU are in last stages of merger. Should Agreements, and number of Occupational Health and this merger be completed, then ZATUC Affiliates will Safety Committees at workplaces. further drop from current 9 to 7.

ZATUC continues to strengthening its working relations with the Government of Zanzibar as well as employers’ EMPLOYERS’ ORGANISATIONS organization. ZATUC presented a proposal for public sector negotiation machinery to the Government and Tanzania, mainland succeeded having it established. ZATUC also played a Founded in 1960, the Association of Tanzania major role in the development of the Zanzibar Youth Employers (ATE) is the main employers’ organization in Employment Action Plan and developed a strategic Tanzania. The organization has representatives in most plan and guidelines for combating HIV/AIDS in private important bi/tripartite organs. Their main objective is to sector work places. enhance sustainable socio-economic development in coordination with the government and trade union ZATUC Congress was held in December 2013. The movement. number of women leaders increased at national level from 27 percent to 54 percent. ZATUC continued in ATE has at least 10 representatives at secretariat and 2015 of promoting young and women leaders in the board level. Based on the limited of data availability, affiliated unions in line with its new policies on gender the eight divisions in ATE had a total 826 enterprise and youth. members in 2008, employing 165,089 workers, which is roughly equivalent of 14 percent of all formal workers A new five year strategic plan and a work plan were (Table 4). In 2016 it has been estimated that ATE adopted, which is related on how to engage with operates with 1,300 enterprise members.3 The majority informal economy. So far 896 members from the of the enterprises are based in Dar es Salaam (70 informal economy have been organized. In 2015 percent) and the remainder in other parts of Tanzania ZATUC set up a national union committee and informal mainland. economy desk on informal economy to organize its workers, and informal economy associations have been Table 4: Membership of Association of Tanzania Employers trained on trade unionism and labour rights. (ATE), 2008 No. of No. of Divisions enterprises employees per It is noteworthy to mention that the teachers union ZATU per division division has reached a membership rate of 52 percent of all Agriculture 30 25,956 public teachers in Zanzibar and the largest affiliated union in ZATUC. However, ZATU is facing a membership Banking and finance 42 10,298 saturation point, and has reached a deadlock in Commerce 288 25,210 collecting dues/payment arrears especially from Industry 259 41,263 secondary teachers who are opposed to a flat rate of Mining 20 6,238 2 percent direct check-off. In 2015 ZATU intensified its Oil industry 17 1,694 membership service by disseminating newsletters, Utilities and services 170 54,430 training manuals and cluster visits to schools. Total members 826 165,089 Source: ILO, Decent Work Country Profile, Tanzania (mainland), 2010

Tanzania and Zanzibar 2016 Page 3

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

The organization provides advisory and representation Representatives’ on some issues prior to meetings have services to its members with industrial relations, legal, been effectuated albeit coordination mechanisms are management, among others. ATE is governed by an not well established. What affects the dialogue has annual general meeting and an executive council. frequently been related to its recommendations are not acted on by the government because of political ATE is an active member of Tanzania Private Sector position. Foundation (TPSF) and East African Business Council (EABC). The organization is affiliated to the Labour Court International Organization of Employers (IOE) and it is The Labour Court is a division of the high court, which also a founder member of the Business Africa formerly settles labour disputes referred to it. This Court is known as Pan African Employers Confederation (PEC). presided by a judge and two assessors from the ATE participates in ILO’s annual conference of which employers’ organizations and trade unions. Tanzania is a member and has one vote as an apex employers’ association in Tanzania. Finally, ATE is It has also been registered that there is no member of the East African Employers Organization administrative sanctions or fines available to labour (EAEO). inspectors. According to ILO, labour inspectors are hindered in their ability to ensure labour law ATE launched the Female Future Program in February compliance because sanctioning an employer through 2016 that aims to attract more women into the courts is cumbersome and appears to depend on the management positons, decision making processes and seldom-used delegation of prosecutorial authority from on Corporate Boards. the Director of Public Prosecutions.5 In addition, the Labour Court lacks resources and processing slightly less Zanzibar than half of the cases it receives.6 Zanzibar's employers’ organization is the Employers Association of Zanzibar (ZANEMA). Main activities are Commission for Mediation and Arbitration (CMA) to represent the private sector in policy advocacy and Labour disputes are mainly regulated and resolved by to conduct training workshops for members. ZANEMA mediation through the CMA. It is an independent maintains good working relations with ZATUC, but the department of the government and has been operating organization faces constraints in terms of manpower since 2007. The functions of this Commission are to resources. Recently ZANEMA expressed that despite mediate or arbitrate in any dispute referred to the hefty work permit fees to protect domestic labour Commission in terms of any labour laws, including forces from alien workers, it should also apply other antiunion discrimination, if the parties to the dispute measures, such as upgrading skills of the workforce.4 agree to arbitration or the Labour Court refers a dispute. The CMA is well functioning and therefore an ZANEMA is member of the East African Employers important organ in the Tanzanian labour market.7 Organization (EAEO). CAM has received 10,281 cases, 6,057 have been resolved and 4,224 have been appealed to the Labour CENTRAL TRIPARTITE STRUCTURES Court for revision during the period 2010-2015 (April) (Table 5). Tanzania, mainland

Labour, Economic and Social Council (LESCO) Table 5: Number of cases in Tanzania Commission for LESCO advises the Minister on e.g. national labour Meditation and Arbitration, 2013-2015 market policy, any proposed labour law before it is 2015 Year 2013 2014 submitted to cabinet. It also collects and compiles (Jan-April) information and statistics relating to the administration Total number of cases 1,751 1,732 1,285 of the labour laws. LESCO consists of an independent Source: Commission for Mediation and Arbitration in Tanzania chairperson and sixteen members all appointed by the

Minister of Labour, which represent the interest of the CAM has encountered a number of challenges, e.g. no government, employers, workers; and four members common understanding on how Workers’ Council appointed because of their expertise. contract should be prepared and applied in practice.

Likewise budgetary crisis/inadequate fund to support Meeting in LESCO have not been often, but with and accomplish matters of workers councils at work occasional consultations with trade unions.

Tanzania and Zanzibar 2016 Page 4

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

places, e.g. the problems with documentation when Figure 2: TUCTA membership covered by Collective registering the workers council contract e.g. its Bargaining Agreements (CBA), 2008-2016 600000 16% commencement and expiry time 14% 14% 14% 500000 Sectoral Wage Boards 12% 400000 The members of the Wage Boards are appointed by 10% the Minister of Labour and Employment in consultation 300000 8% with LESCO. The functions of the Wage Boards are to: i) 6% conduct an investigation on a minimum remuneration 200000 and other conditions of employment; ii) promote 3,0% 4% 100000 collective bargaining between registered trade unions, 2% employers and registered employer’s associations, and 0 0% iii) make recommendations to the Minister on minimum 2008 2009 2010 2011 2012 2013 2014 2015 2016 wages and conditions of employment. Wage boards CBA density (wage & salaried workers) Number of union members covered by CBA have been established in sectors such as domestic service, private security, agriculture, mining, and Note: The year 2016 is an estimation. health.8 Source: TUCTA, TUCTA performance Indicators.

Based on research of comparative collective bargaining Essential Services Committee agreements from development countries from 2015 The Essential Services Committee is composed of showed that 16 percent of CBAs in Tanzania were employers, workers, and government representatives. extended to employers who did not sign the agreement. Workers in certain “essential” sectors, which may not This was relatively higher than the ten other surveyed strike without a pre-existing agreement to maintain countries (eight in Africa), which was estimated at 9 “minimum services”, and workers in other sectors may percent on average. The country has a relatively low also be subject to strike limitation as determined by the share of agreements signed by one or more employers’ Essential Services Committee. This committee has the associations at 21 percent in contrast to the total authority to deem periodically which services are average at 26 percent. The share of CBAs covering the 9 essential. private sector was assessed at 95 percent.10

Collective Bargaining Agreements (CBAs) in Tanzania Other bi/tripartite organs11 Mainland The number of CBAs was recorded by 325 in 2016. It  Workman Compensation Body has been estimated that the CBAs are covering  Work Permit Board 424,000 workers, i.e. 14 percent of the wage and  Vocational Training Board salaried workers (Table 6).  Tanzania Commission for AIDS  National Social Security Board (NSSF) Table 6: Status of Collective Bargaining Agreements (CBAs) in Tanzania, 2016  National Health Insurance Fund Board (NHIF) Number of valid CBAs 325  Public Pension Fund Workers covered by CBAs 423,950  Regulatory Board for Social Security Annual increase of wages per CBAs 0-20 %  Joint Assistance Strategy Share of wage workers covered by CBAs 14 %  Negotiation machinery at the Joint Staff Council Source: The Ministry Advisory Board; WageIndicator 2015, Country (central) and at the Master Joint Staff Council. Profile 2015, Tanzania; LO/FTF Council.  Teacher Education Quality Task Force, EFA Committee The number of workers covered by CBAs experienced a  Education Sector Advisory Council growth of 31 percent from 2010 to 2016 (Figure 2). To point out, in recent years the coverage actually  Education Sector Master Workers Council dropped which were related to the already mentioned  Board of the Vocational Education & Training trade union movement’s organizational challenges. Authority (VETA)  Boards of Trustees  The Ministerial Advisory Board

Tanzania and Zanzibar 2016 Page 5

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Zanzibar Table 7: Status of Collective Bargaining Agreements in Zanzibar Industrial Court Zanzibar, 2016 The Zanzibar Industrial Court is a division of the High Number of CBAs (Oct. 2016) 7 Court of Zanzibar, which settles formal labour disputes Workers covered by CBAs 3,300 conferred to it and like its mainland counterpart the Share of workers covered by CBA 5.1% Zanzibar Industrial Court is presided by a judge and two assessors from employers’ organisations and trade Source: ZATUC and LO/FTF Council research. unions.12 The courts are the only venue in which labour disputes can be heard. According to an ILO labour National OSH Committee administration audit,13 the industrial court is functioning, This committee negotiates for all matters concerning but is slow and irregular due to lack of resources. labour with a legal mandate with reference to the During 2015 the government advised for the speeding Labour Relation Act. Two people from each constituent up of the establishment of industrial court. Among (Employer, Employee and Government) and the chair is others, the Ministry for Justice and Legal Affairs appointed by the minister concerning with labour. initiated hearings with experts to improve the trust of Mainly decision is made by consensus thus the influence the courts as well as delimit the case delays.14 of the parties is high.

Other sources argue that Zanzibar judges and all Other important bi/tripartite organs judicial officers, members of special departments, and  Conflict Resolution Committee employees of the House of Representatives are  Zanzibar Social Security Board excluded from labour law protection.15  Zanzibar Disabled Board Labour Advisory Board  Zanzibar Business Council (bipartite) The Labour Advisory Board consists of nine member,  MKUZA on Irrigation/Poverty Board with three members each from the government,  National Committee on HIV/AIDS employers and workers, all appointed by the Labour  Committee on Education Policy Minister. The board provides advice on labour related  Aids Business Coalition Zanzibar (ABCZ) issues, such as proposed legislation, ILO conventions,  Education Coordinating Board industrial relations, and working conditions. It is required  National Tripartite for Dispute Handling Unit to meet four times a year.16 However, the board is reported not to function effectively and bipartite meetings between trade union and employers association are very informal with general discussions. NATIONAL LABOUR LEGISLATION Constitution17 Wages Advisory Board The Constitution applies to the United Republic of The Wages Advisory Board consists of 13 members, Tanzania. The state is obliged to realize the right to representing government, employers, workers, informal work and social welfare. The freedom of association is economy, commerce and independent experts. It guaranteed, though with several restrictions. Equal provides recommendation for minimum wages and opportunity and just remuneration is enshrined in the working conditions. The board is required to meet twice constitution. a year. This board takes consequential decisions annually and one of the major recent decisions was the A Constitution Review process was initiated in 2013. It new minimum wage fixing in the private sector (see was finalized in 2015. However, the constitutional more in section: Labour Conditions). However, when the referendum was planned to be held in Tanzania in April political tensions are high the dialogue is somewhat 2015, but due to heightening political tensions, delays affected. to voter registration and security sectarian issues led to be postponed. Collective Bargaining Agreements in Zanzibar Unions affiliated to ZATUC have concluded 7 CBA’s, The participating trade union representatives ensured which is up from two in 2012 (Table 7). In the private inclusion of labour rights clauses in a draft constitution sector, affiliated unions have negotiated at least 3 that awaits the coming referendum. There has been CBAs at workplaces; others still on-going. concerns mainly relate to the division of Tanzania mainland and Zanzibar, ethnic relations, ownership of

Tanzania and Zanzibar 2016 Page 6

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

oil and gas reserves, among others. The same awaits foreign employment, contracts of service and the proposed amendment of employment and labour employment standards and rights (hours at work, legislation that takes into account ILO core conventions. wages, leave, vacation, penalties, termination of employment, etc.). The law also establishes the Labour *** Advisory Board, wage fixing machinery and wages protection as well as the Labour Commission and labour The Tanzania mainland and Zanzibar have separate inspection. labour laws: Other legislations Tanzania, mainland Several other legislations exist from Tanzania mainland Employment and Labour Relations Act18 and Zanzibar which regulate and set standards and restrictions for the labour market.23 ILO has registered The Employment and Labour Relations Act of 2004 sets a total 283 national labour, social security and related fundamental rights at work and regulates hours of human rights legislations. Six were registered in 2015 work, remuneration, leave, termination of employment, (none in 2014 and 2016) (see also Table 8): trade unions and employers’ organizations, organizational rights, collective bargaining, strikes and Employment and Labour Laws (Miscellaneous lockouts and sets dispute resolution under the  Amendments) Act, 2015. Commission for Mediation and Arbitration. The labor laws cover all workers, including foreign and migrant  Zanzibar Public Leaders Code of Ethics Act, 2015 workers. (Act No. 4 of 2015).  Youth Council of Tanzania Act, 2015 (registered The Labour Relations Act is contradicted by the Public among ‘Elimination of child labour, protection of Service (Negotiation Machinery) of 200319 for civil children and young persons’ as well as servants by having conflicting regulations concerning ‘Employment policy, promotion of employment and strikes. Amendments of the Act are prepared and are employment services’). underway to parliament discussions.  Non-Citizens (Employment Regulations) Act 2015.  Teacher's Service Commission Act, 2015 (No. 25 of Labour Institutions Act20 2015). The Labour Institutions Act of 2004 applies to the United Republic of Tanzania. It establishes the Labour, Table 8: Status of the national labour, social security and Economic and Social Council, the Commission for human rights related legislations in Tanzania Mediation and Arbitration, the Essential Services 2014 2015 2016 Number of new legislations 0 6 0 Committee, the Sectoral Wage boards, the Labour Source: ILO, NATLEX, Tanzania Administration and Inspection, and the Labour Court. Observations on the labour legislation According to an assessment from 2013 by the Legal Equally important the International Trade Union and Human Rights Centre in Tanzania, 67% of workers Confederation (ITUC) has registered several 21 are completely unaware of the labour laws. observations of the legislations. Among others, they vary from:24 Zanzibar Labour Relations Act22  Power to refuse official registration on arbitrary, Of the laws specifically to Zanzibar, the Labour unjustified or ambiguous grounds; Relations Act from 2005 regulates fundamental  formalities or requirements which excessively delay employees’ rights, establishes the framework for or substantially impair the free establishment of registration of trade unions and organizations, organizations; organizational rights, collective bargaining and  restrictions on trade unions’ right to establish agreements, labour disputes / right to strike, dispute branches, federation and confederation or to prevention and resolution and establishes the Zanzibar affiliate with national and international Industrial Court. organizations;

 administrative authorities’ power to unilaterally The Employment Act dissolve, suspend or de-register trade union The Employment Act from 2005 regulates fundamental organizations; rights and protection, employment procedures and

Tanzania and Zanzibar 2016 Page 7

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

 Compulsory conciliation and/or binding arbitration Table 9: Global Rights Index, Tanzania ranking, 2014-2016 procedure in the event of disputes during collective 2014 2015 2016 Ranking on the Global Rights bargaining, other than in essential services; 3 3 3  Compulsory recourse to arbitration, or to long and Index Note: Five clusters in total with ratings from 1 to 5. A country is complex conciliation and mediation procedures assigned the rating 5+ by default, if the rule of law has completely prior to strike actions; and broken down.  discretionary determination or excessively long list Source: ITUC, Global Rights Index

of “essential services” in which the right to strike is ITUC registered one case on the regular violations of prohibited or severely restricted. rights in 2015.27 This was related to the labour division

of Tanzania’s High Court ruled that a strike by workers Ratified ILO Conventions of Tanzania-Zambia Authority Railways Authority With reference to Tanzania’s ratification of (TAZARA) was illegal. It had been agreed workers international labour standards, a total 35 ILO would resume work if the salary arrears were paid. Conventions are ratified (see also Appendix Table However, not all salary arrears were paid in time, and 25 29): other demands were not met. The government ordered the workers to resume work, failing which they would Ratifications for the United Republic of Tanzania lose their jobs, and directed the TAZARA management  Fundamental Conventions: 8 of 8. to keep a record of the number of days the workers  Governance Conventions (Priority): 1 of 4 were on strike and deduct their salaries accordingly.  Technical Conventions: 26 of 177.  Out of 35 Conventions ratified by Tanzania, of A similarly problem was repeated. TAZARA workers which 34 are in fovece, 1 Convention has been went on strike but were ordered back to work by the denounced; none has been ratified in the past 12 High Court. The strike was called to demand five months. months’ salary arrears. The strikers returned to work after receiving promises that their salaries would be The latest ratified Conventions were the Discrimination paid. The workers did start receiving their salary (Employment and Occupation) Convention (C111) and arrears, after they returned to work, but the process the Equal Remuneration Convention (C100), both from was slow. February 2002. According to the U.S. Annual Country Report on Human A tripartite plan of action of promoting the ratification Rights Practices 2015, 28 many private sector employers of the Domestic Workers Convention No. 189 was adopt antiunion policies or tactics, although case law launched in February 2014. discourages discriminatory activities by an employer against union members. This is on both the mainland and With reference to the Article 22 of the ILO Constitution, Zanzibar. i.e. annual reports on ratified Conventions, both the International Organization of Employers (IOE) and ITUC Other antiunion activities were registered such as had observations to the Convention 87 on Freedom of international mining interests engaged in paying Association and Protection of the Right to Organise in officials from the Ministry of Labour Inspectorate to Tanzania in 2015; only the latter organization received ignore worker complaints or to write favorable reports responses from the government, so far.26 on working conditions. It was also registered that during 2015 some mining interests barred unions from organizing and used security staff to block labour TRADE UNION RIGHTS VIOLATIONS inspectors from entering mines. TUCTA officials stated there were many instances of discrimination against Tanzania has been ranked as 3 out of 5 at ITUC’s union workers. Mining companies reportedly established Global Rights Index since 2014 (Table 9), which was employer-controlled unions called “welfare committees” classified as ‘regular violations of rights’. This is and declared workers redundant to prevent organizers interpreted as governments and/or companies are from starting a union. The Tanzanian Mining and regularly interfering in collective labour rights or are Construction Workers Union (TAMICO) reported 120 failing to fully guarantee important aspects of these active cases of unfair termination involving mining rights. There are deficiencies in laws and/or certain companies in different stages of adjudication. TUCTA practices which make frequent violations possible.

Tanzania and Zanzibar 2016 Page 8

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

also reported cases of hotels and construction firms According to the Income Tax Act from 2004, the dismissing employees for attempting to unionize. resident individual income tax rates applicable in Zanzibar differ from those which are applicable the Both Tanzania mainland and Zanzibar have no cases Mainland. The public sector minimum wage in Zanzibar with the ILO's Committee of Freedom of Association.29 increased from TZS 180,000 (US$111) in 2013 to TZS 300,000 (US$137) per month from April 2016, reaching an increase of 66 percent. In 2010, before the WORKING CONDITIONS minimum wage increase, the median wage was around TZS 170,000 (US$122), notably higher than on the In Tanzania mainland minimum wages are fixed by the mainland. It has been observed that officials Government after tripartite consultation in the LESCO responsible for checking minimum wages are often based on recommendations from 12 sub-sectoral wage corrupt, with the result that some rival businesses can boards. ignore the law without being penalized, which includes

kept in check enterprises in the informal economy.30 In July 2014 the minimum wages for public sector were raised from 200,000 TZS (US$120) to 240,000 TZS Table 10: Wages and earnings Monthly average and legal (US$144). TUCTA and the Ministry of Labour agreed to minimum wages increase minimum wages by 11 percent in 2015/16, Current Current Shilling but in future, minimum wage negotiations will be dealt US$ (TZS) by special wage regulatory committees and social partners. Public civil servants have received increased Tanzania, nation wide travel allowances (up to 50 percent) after years of Mean nominal, average wage 356,666 226 lobbying by trade unions to align salaries with the (2012) rising cost of travelling fees and accommodations. Minimum wage, average (2015) 310,000 167

The government announced in July 2014 a substantial Tanzania, mainland increase in private sector minimum wages up to 65 percent. The decision to raise statutory minimum wages Highest minimum wage (2013-16) 400,000 248 for private sector employees came after years of debate. The announced increase brought the minimum Lowest minimum wage (2013-16) 40,000 25 wages to TZS 40,000 (US$25) per month for domestic Median wage (2012) 114,400 72 workers, which is the lowest, while TZS 400,000 (US$248) for workers in the commercial and Zanzibar communication services is the highest (Table 10). Minimum wage (public sector) 300,000 137 (2016) TUCTA has been advocating and lobbying for a minimum wage policy, wage boards for public sector Median Wage (2010) 170,000 122 put in place; and reduction of tax rates for low income Source: ILO, Global Wage Report; The Citizen, Minimum salary raised earners. Intensive TUCTA protests have eventually to Sh310,000, May 19, 2015; WageIndicator.org, Minimum Wages caused the President to form a tripartite task force to in Tanzania with effect from 01-07-2013 to 30-06-2016; and WageIndicator.org, Minimum Wages in Zanzibar with effect from 01- sort out the issue. As a result a new minimum salary 04-2016. raise was reached in June 2015 at TZS 310,000 (US$167) per month. In addition, the Pay-As-You-Earn The real minimum wage has been affected negatively (PAYE) – i.e. withholding tax on taxable incomes of by the rising inflation in consumer prices during the employees - was reduced from 12 percent in 2014 to 2010s, so far (Figure 3 & Figure 23). 11 percent in 2015 (June) for income between TZS 170,000-360,000 per month. No income tax under TZS 170,000 per month. The government promised in May 2016 a PAYE reduction of 2 percent across the board and it was welcomed by TUCTA and ATE. Be as it may, the inflation of consumer prices, the exchange rate and consumable tax increases are curbing the salaries tax- cuts.

Tanzania and Zanzibar 2016 Page 9

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Figure 3: Minimum wage trend in Tanzania, 2000-2016 Laws regulate safety in the workplace, but the 120000 Occupational Safety and Health Authority (OSHA) is 100000 ineffective. According to sources, the inspection system

80000 operates with a limited effectiveness and a small number of labour officers are available to conduct 60000 inspections. As an example, mining companies take 40000 advantage of these limitations to avoid inspections.33

20000 The authorities operate with 88 labor inspectors on the

0 mainland; the number of inspectors in Zanzibar was

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2000 unavailable. It equals one inspector per 270,034 Minimum wage Real minimum wage workers in the workforce. In contrast, the ILO

Note: This measured minimum wage covers unskilled workers. recommends one inspector per 40,000 workers in less Source: ILO, Global Wage Report; WageIndicator.org, Minimum developed countries.34 Thus, Tanzania has very low Wages in Tanzania with effect from 01-07-2013 to 30-06-2016. inspector coverage. Although earnings are pegged on productivity indices, in practice wages are related to levels of education, i.e. A large majority of workers do not have employment those sectors employing workers with low levels of contracts and lacked legal protections. Based on a education pays lower wages. Other facts demonstrate study form the Legal and Human Rights Center (LHRC), that only 6 percent of annual graduates from when companies offer written contracts in compliance secondary and tertiary schools in the mainland find with labour laws, they do not fulfill the contracts’ terms. formal waged employment.31 In addition, the For example, 99 percent of contract documents do not Employment and Earnings Survey from 2015 revealed include job descriptions, an omission used to exploit 35 by comparisons of monthly wages across sectors that workers. one out of four (25 percent) of the employees in both public and private sectors earn monthly wages between TZS 300,001- 500,000 (US$147 - US$244).32 WORKFORCE The total population of Tanzania is 51.1 million (1.3 General working conditions in Tanzania are available million in Zanzibar) and an estimated total workforce below (Table 11). Generally, the labour standards are by 23.8 million workers in 2016. Men (81 percent) are not effectively enforced, particularly in the informal more engaged active in the labour market than women economy. (71 percent). Tanzania holds a slightly higher employment-to-population ratio than the Eastern Africa Table 11: Working Conditions in Tanzania average (Table 12). Normal Weekly Hour 45 hours (mainland Tanzania) Limit 12 hours (including overtime); Table 12: Employment-to-population ratio, Age and Sexes distribution, 2016 Overtime Limit 50 hours over a 4-week Eastern period (mainland) Sex Age Tanzania Africa Max. Weekly Hours Limit 57 hours (mainland) Total 15+ 76 % 74 % Men & Min. Mandatory 50% increase (mainland Youth 15-24 61 % 59 % Overtime premium/time Tanzania); no universal natinal women Adult 25+ 84 % 82 % off in Lieu of Overtime entitlement to compensatory Wages time off Total 15+ 81 % 79 % Min. Annual Leave 20 days (mainland Tanzania) Men Youth 15-24 66 % 63 % Duration of Maternity Adult 25+ 90 % 88 % 84 days Leave Benefits Total 15+ 71 % 69 % Amount of Maternity 100 % Women Youth 15-24 55 % 56 % Leave Benefits Adult 25+ 79 % 76 % Source of Maternity Social ensurance Sources: ILO, Key Indicators of the Labour Market (KILM), 9th Edition. Leave Benefits Source: ILO, Working Conditions Law Report 2012. During the last decade, the country’s total employment rate has been on a decreasing trend, but stayed flat

Tanzania and Zanzibar 2016 Page 10

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

since 2013. It has since then followed the Eastern Africa The inactivity on the labour market increased among average rate. Youth experienced a very high both men and women, but especially expanded fast in employment rate declining trend from 80 percent in 2011 among the latter segment, staying flat since 2013 2007 to 65 percent in 2016, gliding below the region’s (Figure 5). average (Figure 4). Figure 5: Inactivity rate trend in Tanzania, 2007-2016, Figure 4: Labour force employment rate, 2007-2016, % Sexes, % 95 30 90 25 85

80 20

75 15 70 10 65

60 5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total - Tanzania Youth - Tanzania 0 Total - Eastern Africa Youth - Eastern Africa 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources: ILO, Key Indicators of the Labour Market (KILM), 9th Edition Men Women Sources: ILO, Key Indicators of the Labour Market (KILM), 9th Edition Sources reported that around 850,000 young people enter the country’s job market annually, but only Skills mismatch 50,000 to 60,000 formal sector jobs are created each Based on estimations, skills mismatch between labour year. With more than 66 percent of the population supply and demand by educational attainment is under 25, this job shortage will keep rising.36 It gives present in Tanzania, with an estimated 28 percent in pressure on the unemployment and underemployment as 2013 and a noteworthy gap between men (21 percent) well as a growing informal economy. and women (32 percent).

In Zanzibar the labour market is estimated to hold In terms of skills mismatch between job requirements 70,000 public and private workers from the formal and qualifications has been assessed at 40 percent in sector. The informal economy is expanding along a high terms of incidence of under-education and 14 percent unemployment. As a result of promoting the need for of over-education (Table 14). This indicates that many decent employment, over 2,800 jobs have been youth have few opportunities to learn skills to help them created in 2015. start and sustain enterprises.

Inactivity Table 14: Skills mismatch between job requirements and One out of five (22 percent) of the working-age qualifications in Tanzania, 2013 population (WAP) and 35 percent of the youth Total Men Women Incidence of over- population (15-24 years old) are inactive on the labour 14 % 13 % 15 % market. These trends have been on a fast increase from education Incidence of under- 2007 to 2016: a relatively high increase by 89 percent 40 % 41 % 38 % among the total WAP and at 70 percent among youth. education Source: ILO, Key Indicators of the Labour Market (KILM), 8th Edition. There is a significant gap between men (17 percent) and women (26 percent). It remains similar among youth (Table 13). Labour productivity Tanzania has demonstrated a slightly higher labour Table 13: Inactivity rate in Tanzania, 2016, % productivity growth than the Eastern Africa average, Total Men Women but it remains below the sub-Saharan Africa average (Figure 6). The improvements are related to an Inactivity rate 22 % 17 % 26 % expansion in agricultural production, services, Inactivity rate, youth 35 % 30 % 40 % construction as well as an increased access to electricity. Sources: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

Tanzania and Zanzibar 2016 Page 11

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Figure 6: Labour productivity, 2007-2016 Figure 7: Unemployment rate trend in Tanzania and 40000 250 Eastern Africa, 2007-2016 12 35000

197200 190 10 30000 183 176 164 25000 158 147 150 8 135 140 20000 130 6 15000 100 4 10000 50 5000 2

0 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tanzania Eastern Africa Sub-Saharan Africa World Total - Tanzania Youth - Tanzania Index year 2000 (=100) Total - Eastern Africa Youth - Eastern Africa Note: Labour productivity is defined as output per worker (i.e. GDP Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition. constant 2011 international US$ in Purchasing Power Parity (PPP)); and indexed year 2000 (=100). Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition. Unemployment rates differ depending on the locality. According to the mentioned 2014 ILFS, data signal that the rural areas have a lower unemployment rate at 8.4 Unemployment percent in 2014; and it has been on a slender increase ILO's has estimated Tanzania's unemployment rate (i.e.: since 2006, assessed at 7.5 percent. Urban zones have "without work", "currently available for work" and a higher unemployment rate at 13 percent, which has "seeking work") at 3.3 percent whereas youth declined significantly from 23 percent. To point out the unemployment is double as high at 6.4 percent in 2016. unemployment rate in Dar es Salaam) remains very high The national 2014 Integrated Labour Force Survey at 22 percent.38 (ILFS) illustrated higher rates at 10 percent and 13 percent, respectively.37 These figures diverge due to Still close to 137,000 are discouraged jobseekers. different methods. Overall, women have higher Three-quarters are women and one-quarter is men. unemployment rates than men, except in terms of the Moreover, across age groups, more than three-quarters underemployment (Table 15). of discouraged job seekers (79 percent) are youth aged 15 to 35 years. The largest group of discouraged Table 15: Unemployment in Tanzania, 2016 job seekers is that of women youths at 59 percent. Sexes Rate As many other countries in the sub-Saharan Africa, the Total 3.3 % Tanzanian population increases with many young Unemployment Men 2.3 % Tanzanians entering the labour force as well as moving from rural to urban areas. The economy is simply not Women 4.3 % able to generate enough jobs in the formal economy to Total 6.4 % absorb them. Youth in Dar es Salaam are six times more likely to be unemployed than rural youth. Many end up Youth Unemployment Men 5.3 % in the informal economy. Women 7.7 % Total 7.8 % Newly recruited workers are on increase: In 2011/12 Underemployment was around 75,000 as compared to 48,000 workers Men 8.2 % (2006) recruited in 2010/11. The majority of the newly Women 7.6 % recruited workers were technicians and professionals. Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition. However, employment services in Tanzania are unpopular and ineffective. Not to mention, it is The unemployment rate has stayed stable in recent insufficient to curb the rising youth unemployment and years and significant below the Eastern Africa underemployment. These themes are areas of policy averages (Figure 7). concern due to the previously mentioned high new

Tanzania and Zanzibar 2016 Page 12

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

entrants in the labour market coming from schools and see more differences on the employment per sector on colleges each year.39 Table 16.

Unemployment in Zanzibar Table 16 : Employed persons and GDP share per sector, Official data have estimated the Zanzibar general 2014 GDP population unemployment rate at 4.4 percent in 2010. Sector Men Women The youth unemployment is significantly higher at 17 share percent; and women are the majority compared to men. Agriculture 6,493,324 6,916,489 32 % According to the authorities, this is a strong indication Mining & 173,926 44,098 4.0 % that unemployment in Zanzibar is essentially a youth quarrying phenomenon.40 Based on other methids of measuring the Manufacturing 362,769 252,554 6.1 % unemployment, other sources argue that the Electricity, gas & unemployment rate is much higher at 34 percent in 27,133 5,850 1.3 % water 2012; with youth joblessness and underemployment estimated at 85 percent.41 Unemployment in Zanzibar Construction 408,697 13,698 14 % 42 Trade, restaurants has also been called a “ticking time bomb”. 1,402,244 1,913,565 13 % & hotels Transport, storage 526,414 26,017 7.0 % In Zanzibar the Ministry for Labour and the Ministry of & communication Public Services were drawn together as the Ministry of Finance, real State President Office Labour and Public Service, thus estate & business 31,607 35,016 11 % services merging labour and public service issues. Zanzibar's Public Employment Policy was adopted in 2005 and endorsed administration, 565,247 371,716 7.2 % in 2009. Following a 2012 government report on the education and employment situation, ZATUC asked the Government to health develop a plan of action. The exercise resulted in the Other services 152,041 307,733 5.9 % Zanzibar Youth Employment Policy, which holds issues on Total 10,143,402 9,886,736 100 % youth employment and job creation. Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition & African Economic Outlook, Tanzania 2016

Sectoral Employment Another key point is that the agricultural sector is also A majority of people in employment are concentrated the biggest employer for young people. Albeit it small- in the agriculture sector (67 percent) followed by scale agricultural producers are not characterized as service sector by 27 percent and the industry sector at workers in the informal economy, but termed as self- 6.4 percent. There is a very little marginal gender gap employed, they do not have any access to decent work on the total employment share of workers. benefits, coverage of labour rights and social protection. The trade, hotel and restaurant sector from the service sector has also a relatively high employment rate at 17 In the last decade, Tanzania has experienced some percent. sectoral shifts. The employment trend from the period 2001 to 2014 demonstrates that the agricultural sector Men are dominating the construction sector (97 percent), declined from 82 percent in 2001 to the already the transport and communication sector (95 percent), the mentioned 67 percent from 2014. Instead the mining and quarrying sector (80 percent), the electricity, employment in the industry sector grew from 3 percent gas and water sector (82 percent), and the public to 6 percent while the service sector from 15 percent to administration, education and health sector (73 27 percent, respectively (Figure 8). This could also percent). explain part of the increasing labour productivity that was previously showed. The finance, real estate & business services sector has relatively low employment rate (0.3 percent) but a relatively very high GDP share at 11 percent. In contrast, in terms of the mentioned high employment in the agricultural sector (67 percent), it has relatively low GDP share, which was estimated at 32 percent. You can

Tanzania and Zanzibar 2016 Page 13

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Figure 8: Employment by aggregate sector in Tanzania, Figure 10: Status of employment in Tanzania, % 2001-2014 40 100 90 88 90% 84 82% 76 80% 75% 69 70% 67% 20 48 50 60% 42 50% 40% 0 0 30% 27% 20% 1991 2001 2002 2006 2007 2011 2013 20% 15% Wage & salaried workers Employers Contributing family workers Own-account workers 5% 6% 10% 3% Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition 0% Agriculture Industry Service The own-account workers and contributing family 2001 2006 2014 workers make up a category of “vulnerable Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition employment”, i.e. they are less likely to have formal work arrangements, and are therefore more likely to The structural changes on the sectoral employment have lack decent working conditions, adequate social security also been reflected by significant alteration on the and ‘voice’ through effective representation by trade sector share of the Gross Domestic Product (GDP). The unions and similar organizations.43 This category fell by agricultural sector experienced a drop from 33 percent 23 percent in the period 1991-2013, i.e. from 91 in 2000 to 30 percent in 2015. The industry sector percent to 71 percent, respectively. increased from 19 percent to 26 percent, while the service sector leaped from 47 percent to 44 percent, A study shows that that there are about five million non- respectively (Figure 9). In comparison with the sectoral farm businesses in Tanzania, which mostly consist of employment (Figure 8), the economy is not creating household enterprises. This number is growing fast at sufficient new jobs in the industry sector, which is more approximately 10 percent-15 percent per year, fueled created by capital formation (Figure 24); while the by the rapid urbanization and by lack of other service sector has a declining labour productivity that employment options for the majority of Tanzanian are related to a dominating informal economy. workers. As a result about half of small non-farm businesses are located in urban centers today. As Figure 9: Sector Share in Tanzania, 2000-2015, % of GDP mentioned, they are very small with little specialization; 60 they tend to operate only a few hours per day or a few days a week.44 Figure 11 shows that close to nine 50 out of ten (88 percent) enterprises are between one to 40 four employees. Around 70 percent to 90 percent of the workforce in the private sector is casual labours. 30 The country has a low professional density, e.g. very low numbers of accountants and lawyers.45 20 Figure 11 : Distribution of enterprises by size in Tanzania, 10 2011

0 Medium (5- Large (10 - 9 <100 employees); employees); 9% 2% Agriculture Industry Serice

Source: World Bank, World Development Indicators

Also some structural changes have been observed in the Small (3-4 status of employment. Especially own-account workers employees); 28% Micro (1-2 have experienced a significant decrease from 90 employees); percent in 1990 to 42 percent in 2013. As a contrast, 60% both waged & salaried workers and contributing family Source: Africa Investments, Labour Force Profile, Tanzania Business workers increased (Figure 10). Sector Support - Programme Phase III - BSPS III 2008-2014, 2014.

Tanzania and Zanzibar 2016 Page 14

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

The government operates with the Vision 25 that is labour from the other five member states. So far, based on three five-year development plans that Tanzania has been very reluctant to open its borders linkage with skills development initiatives. The sectors and thus lack behind neighbouring countries in services, engineering, manufacturing, constructions, and implementing the provisions in the EAC’s Common health and welfare have high skills targets. A study has Market Protocol. showed, though, that the planned enrolment targets, especially in the health and welfare sectors, Discrimination against migrant workers also occurred. engineering as well as technical and vocational levels Migrant workers often faced difficulties in seeking are far behind the targets. There is a mismatch of the legitimate employment. In March 2015 the parliament labour market’s needs relative to the government’s passed the Non-Citizens Employment Regulation Act, effort in terms of funds and enrolments. which gives the labour commissioner authority to deny work permits if a Tanzanian worker with the same skills is available. Because legal refugees lived in camps and Migration could not travel freely. In Tanzania almost double as many leave the country than enter in comparison with the sub-Saharan Africa Equally important the internal migration in Tanzania is average. This is frequently due to native Tanzanians under an evolution. Like in many other African countries, migrating for labour opportunities. Due to Tanzania’s Tanzania is experiencing a fast urbanizing. Albeit this stability it has hosted many refugees from conflict urbanization has been an economic power engine in riddled neighbouring countries, mainly Rwanda and Asia, it has, so far, not experienced the same impact in Burundi. Many of these have returned home, which is Tanzania. reflected in the decline of -300,000 net migrants in the period 2006-2010 to -150,000 in 2008-2012 (Table 17). Informal Economy According to Tanzania’s National Bureau of Statistics Table 17: Key Migration Facts in Tanzania the informal employment refers to employed persons who by law or in practice hold jobs that are not Net migration Tanzania -150,000 (2008-2012) protected by labour legislation, not subject to income - 1 : 1,501 tax or entitled to social protection and employment Net migration to Tanzania inhabitants benefits. Informal employment can be found in the average population 48 (2008-2012) Sub-Saharan - 1 : 2,838 informal economy, formal sector and the household. Africa inhabitants Tanzania 0.2 % Remittances received, % Based on the 2014 Integrated Labour Force Survey, of GDP (2012) three-quarter of paid and self-employed employees in Sub-Saharan 2.0 % Africa non-agriculture have informal employment (76 percent) Source: World Bank, World Development Indicators with a higher proportion of women (82 percent) than

men (72 percent). Stated differently, Tanzania has a Tanzania Immigrations Authorities often carry out challenge of employment informality. blueprint operations to catch illegal immigrants.

However, in 2014 almost 170,000 Burundians living in Based on broader definition of employment in the Eastern parts of Tanzania were granted citizenship. informal economy (i.e. including workers from Survey data from 2013 also showed that only 0.13 subsistence farming), demonstrate that the vast majority percent of the total workforce is regular non-citizen of Tanzanian mainland and Zanzibar workers (85 employees. It suggests that most immigrants operate in percent and 88 percent, respectively) are employed in the informal economy.46 this ‘sector’ (Table 18). A gender gap in terms of paid

employees and self-employed in non-agriculture is In practice, Tanzania is attracting labour migrants.47 On present. the other hand, a relatively very low share of remittances is directed towards Tanzania, which indicates few Tanzanians abroad sending money home to their families.

The East African Community (EAC) commits Tanzania to adopt measures to the free movement of persons and

Tanzania and Zanzibar 2016 Page 15

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Table 18: Employment in the informal economy in employed in the agricultural sector. The survey also Tanzania showed that the more young people tend to have no Paid employees and Total 76 % contract. The median wage for workers with a self-employed in non- agriculture (Mainland) Men 72 % permanent contract is more than double than for (2014) Women 82 % workers with no contract. In Zanzibar, 33 percent do not operate with contracts (Figure 12).50 Tanzania (2014) 85% Share of persons employed in the informal Figure 12: Employment in the informal economy economy Zanzibar (2010) 88 % Source: ILO & DFID, Zanzibar Social Protection Expenditure and Employment status, mainland Performance Review and Social Budget, 2010; The National Bureau of Self- Statistics, the Integrated Labour Force Survey (ILFS), 2014. employed No 7% contract Survey data have outlined that a growing 26% informalization of the proportion of households with informal ‘sector’ activities increased from 40 percent in 2006 to 43 percent in 2014, which has been related to Permanent Fixed-term labour that the urban economy has a lack of formal jobs contract contract 26% 41% alternatives (Table 19). Employment status, Zanzinar No contract Table 19: Proportion of households with informal sector 8% activities, 2001-2014 Self- employed Area 2001 2006 2014 25%

Dar es Salaam 62 % 57 % 65 % Fixed-term contract Permanent 45% labour Other urban 61 % 54 % 57 % contract 22% Rural 27 % 33 % 32 % Source: WageIndicator, Data Report, Wages in Tanzania, WageIndicator survey 2012; and WageIndicator, Data Report, Wages Total 35 % 40 % 43 % in Zanzibar, WageIndicator survey 2013

Source: The National Bureau of Statistics, the Integrated Labour Force Survey (ILFS), 2006; the National Bureau of Statistics, ILFS, 2014. There is a big room to widen the tax base in the informal 'sector' and improve government revenue There are no formal policies and legislation developed performance, but, in practice, it is the informality that by the government in formalizing informal economy, complicates it. Trade unions and cooperatives in except social security reform has promoted to roll over Tanzania have demonstrated as natural partners in into the informal ‘sector’ (see also the section: Social providing services and support to curb the informal and Protection). Moreover, the formal registration of unprotected situations of the workforce.51 companies can be measured as a proxy of the possibilities of formalizing doing business in Tanzania. In Tanzania's National Employment Policy (NEP) has terms of the ease of ‘Starting a Business’ in Tanzania assessed that the informal economy has a capacity to was ranked at 129 out of 189 countries (see also Table employ 63 percent of the yearly increasing labour 26). It is higher than the sub-Saharan Africa average, force in urban areas while the formal sector is 8.5 but measured lower than the neighboring countries percent.52 Burundi (19) and Rwanda (111) rankings. Just as in many other African countries, most new jobs are created in the informal economy, crowding-out jobs in Child Labour the formal sector. The informal economy also absorbs Child labour was estimated at 29 percent in Tanzania many of youth, since unemployment is not an option. in 2014, which is similar than the sub-Saharan Africa average (Table 20). The largest number of working A Tanzania mainland Wage Indicator survey from children is in unpaid family workers (93 percent) and 2012 showed that around 33 percent work without a nine out of ten (92 percent) are in the agricultural 49 contract. The survey preselected workers, though, who sector. In the more urban zones the children work as have better conditions as it sampled registered self- domestic workers, street vendors, and shopkeepers. employed and employees, and not unregistered self-

Tanzania and Zanzibar 2016 Page 16

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

In Zanzibar only 9 percent of 5-17 year olds are violence against children and for its promotion of child reported to be engaged in child labour. These children rights.55 worked primarily in transportation, fishing, clove picking, domestic labor, small businesses, and gravel In Tanzania the number of HIV orphans exceeded 1.3 making. million representing the word’s third highest number of HIV orphans. Tanzania's trade unions implement Table 20: Working children Proportion of all children, age activities aiming at helping children to stop work and 5-17 years register for schooling, and at supporting vocational Region Year Type % training programs that equip youth with skills and Tanzania, Child labourers 29 % enhance their meaningful employability.56 2014 mainland Hazardous work 22 % Zanzibar 2006 Child labourers 9 % Children in 28 % Gender Sub- employment Saharan 2008 Child labourers 25 % As already mentioned, the labour force participation Africa rate has been on a declining trend during the last Hazardous work 13 % Note: Children in employment include all children who conduct decade. According to estimations, this has particularly some kind of work, whereas child labourers are a narrower term happened among women that fell from 88 percent in without mild forms of work. Hazardous work is the worst from of child labour as defined in ILO C182. 2007 to 74 percent in 2016 while men from 90 percent Source: National Bureau of Statistics, Tanzania National Child to 83 percent, respectively (Figure 13). This has Labour Survey 2014; ILO, IPEC, National Action Plan for the elimination of child labour 2009 - 2015; ILO, Accelerating action widened the gender gap significantly from 1.7 percent against child labour, International Labour Conference, 99th Session in 2007 to 9.7 percent in 2016. 2010. Figure 13: Labour force participation rate, sexes, % The Government launched the National Costed Plan of 95 Action for Most Vulnerable Children II (2013-17), which includes plans to provide social services to vulnerable 90 children, including child laborers. However, not much has 85 been achieved in recent years, except initiating a 80 National Child Labour Survey and with some support 75 programs on the elimination of child labour.53 70 65 Law prohibits the exploitation of children in the 60 workplace. Among others, the minimum age for 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 contractual employment is 14. Children over 14 but Men Women under 18 may be employed to do only light work Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition unlikely to harm their health, development, or attendance at school. However, the government does Unequal division of labour responsibilities and decision not effectively enforce the law. One reason is that making within the family, limits women’s control over many children work in private homes or rural areas. household assets and income. For example, while And distance from urban-based labour inspectors and women have some decision making powers on the the unwillingness of children to report the conditions of utilization of their income, the amount of money earned their employment complicated inspections the was insufficient to meet household needs adequately. enforcement of the law. On the same token, the children Thus, majority relies on their children’s earning to are vulnerable to exploitation and with few protections. supplement the family income.57 It has been registered that no reported child labour cases have been brought to court in 2015.54 Women’s slightly lower levels of education are barriers for women obtaining better-paid jobs on commercial It is noteworthy to mention that Zanzibar’s child rights farms just as working on agricultural estates they are law from 2011 was the winner of the 2015 Future frequently the pickers and packers. Very rarely they Policy Award on securing children’s rights, beating 29 attain management positions. In practice many women other nominated policies to the prize. It earned the are locked out of land ownership, access to credit and award for its balanced coverage of child abuse and productive farm inputs, support from extension services and access to markets.

Tanzania and Zanzibar 2016 Page 17

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Gender-based discrimination in terms of wages and the fast increasing contributing family workers among legal protections in employment occurred frequently. youth (see also Figure 10). The youth population covers For example, young women earn lower incomes where 57 percent of unemployed workers in 2016, and is they are employed, and often face hostile conditions in significantly higher within urban areas; and likely to seeking employment and within the workplace. increase with their population growth. When comparing youth unemployment rate between men and women, the A 2013 Enterprise Survey reported that 24 percent of latter outnumber the former with a gap of 2.4 percent firms had women participation in ownership in (Figure 15). Tanzania, which is lower than the sub-Saharan Africa's average at 34 percent. Tanzania has also a lower Figure 15: Youth unemployment rate, 2007-2016, sexes, % score in terms of firms with women in top management 9 (Figure 14). 8

Figure 14: Women in Management and Ownership, 2013 7 40% 6

35% 5 30% 4 25% 3 20% 15% 2 10% 1

5% 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Firms with female top manager Firms with female participation in ownership Youth - Men Youth - Women Tanzania Sub-Saharan Africa Low income Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

Source: World Bank & IFC, Enterprise Surveys: Tanzania Country Profile 2013 The majority of Tanzanian youth had begun their transition from studying to the labour market. As a Trade unions need for increased gender equity in matter of fact, based on a survey from 2014, young membership. Some improvements have been registered. Tanzanians are either in a period of labour market TUCTA and ZATUC are also collaborating with the transition (47 percent) or has completed their transition trade union confederation for the East African to a job designated as either stable and/or satisfactory Community EATUC to promote gender equality, both (32 percent). With attention to nearly one-third of within the and in Tanzania.58 Tanzanian youth has completed their transition, most are experienced into low-skill or unskilled manual jobs that Although employers in the formal sector are more the respondent deemed satisfactory. This is likely to be attentive to laws against gender discrimination, this is a on recognition of the limited options available. After all, more critical issue in the informal economy. And, in the young people are rarely found in professional jobs as informal economy, women are disproportionately managers, professionals or technicians.60 The private employed, as previously mentioned. In practice, women sector employs slightly more young people than the often are employed in hazardous jobs, bullying, threats, public sector.61 and sexual harassment.59 Sources have demonstrated that Zanzibar’s youth tend to be slightly better educated than the mainland’s. In Youth contrast the former are less likely to be employed than Nearly 1 out of 2 (47 percent) of Tanzania’s population the latter. The agriculture and tourism sectors are the 62 is under 15 years of age. A youth boom is thus primary industries employing youth. expected to rise in the upcoming years.

Since paid employment in rural areas is limited, it pushes an increasing rural-urban migration of young people. This is not met by supply of jobs. This explains

Tanzania and Zanzibar 2016 Page 18

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

EDUCATION entered a decline from 2012 to 2013, reaching 33 percent. In terms of schooling, Tanzania’s population receives on average of 5 years education. Around three out of four Tertiary educations have also lower enrolment rates (26 percent) have been in school enrolment. When it than the rest of the region with a high gender gap comes to secondary school, there are only a few (Figure 16). Tanzanians who have attained this level of education. Not to mention very few have completed university Figure 16: School Levels and Enrolment (Table 21). Boys and girls, Tanzania and the sub-Saharan Africa (SSA), 2000-2013, % Table 21 : Highest level of schooling attained Net enrolment in Primary School 100 Population 25+, Total and Women, 2010 Highest Level Attained Total Women 90 Boys - No Tanzania 26 % 34 % Schooling 80 Girls - Begun 17 % 17 % Tanzania Primary 70 Completed 49 % 43 % Boys - SSA

Begun 5.5 % 4.0 % 60 Secondary Girls - SSA Completed 1.2 % 0.8 % Begun 0.2 % 0.3 % 50 Tertiary Completed 0.5 % 0.5 % 40

Average year of total

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 5.1 years 4.5 years 2000 schooling Source: Barro, Robert and Jong-Wha Lee, April 2010, "A New Data Gross Enrolment in Secondary School Set of Educational Attainment in the World, 1950-2010." NBER 50 Working Paper No. 15902. 45 Boys - Based on a Basic Education Master Plan, the Tanzanian Tanzania 40 government aimed to achieve universal access to basic Girls - Tanzania education for children over the age of 7 years and 35 ensures that at least 80 percent of children complete Boys - SSA primary education. 30 Girls - SSA

And the government has successfully implementing free 25 and compulsory primary education since 2001. Data 20

show that the primary enrolment rates increased very

2013 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 fast in the beginning of the 2000s, peaking at 95 Gross Enrolment in Tertiary School percent in 2006 for both boys and girls. And this is with 12 the high prevalence of child labour in Tanzania in mind. However, during the last decade the high primary 10 enrolment rate has plummeted reaching 80 percent in 8 Boys - 2013. It is now in line with the sub-Saharan Africa Tanzania average for boys while girls are still slightly higher than 6 Girls - the region average (Figure 16). The expansion in Tanzania Boys - primary school has not been equalled by expansion of 4 SSA teachers and schools facilities, which constrain the Girls - 2 SSA educational system. This includes with low teaching time, weak performance incentives for teachers, delayed or 0

insufficient resource flows to schools, and absence of

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2000 student assessments in early grades, according to Note: Net enrolment is the ratio of children of official school age, who sources.63 are enrolled in school to the population of the corresponding official school age. Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Data for enrolment in secondary school show a lower Gross enrolment can therefore be higher than 100 percent, but with tertiary or university education, the age of the pupils is more diverse. rate than the sub-Saharan Africa average and has Source: World Bank, Education Statistics.

Tanzania and Zanzibar 2016 Page 19

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Vocational training July 2016 to plug the gaps for skilled labours currently There has been a 39 percent increase of pupils in depending on the VETA.64 vocational training in Tanzania in the period from 2010 to 2013, reaching 248,239 pupils. Also the ratio of It is estimated that 37 percent of formal firms in pupils in vocational training in terms of all pupils in Tanzania are offering formal training.65 Due to the secondary education was 11 percent, which is higher Skills and Development Levy employers in Tanzania are than the sub-Saharan Africa average. It should be required by law to pay 6 percent of their wage bill. mentioned, though, that the rate of secondary pupils is Two percent of the wage bill goes to the Vocational lower in Tanzania in comparison with the sub-Saharan Training Fund, which is administered by VETA and 4 Africa average which inflates the vocational pupils’ percent is remitted directly to the Treasury. Recently the ratio (Table 22, Figure 16 & government has allocated the 4 percent to the Higher Figure 17). Education Student Loans Board (HESLB). Employers have argued that the levy is unacceptably high, and that

there is misallocation of the 4 percent remitted to the Table 22: Status of Vocational Training in Tanzania, 2013 Treasury.66 On the other hand, the trade unions seem to Pupils in vocational training Tanzania 248,239 have played a modest role in developing the Tanzania 46 % vocational education and training system. The unions Pupils in vocational training have not been very active in developing policies or (% females) Sub-Saharan 40 % Africa (2012) putting forward initiatives in this field.

Ratio of pupils in vocational Tanzania 11 % student to all pupils in Apprenticeships average 21 months. The training fee is Sub-Saharan secondary education 7.6 % an average around TZS 4,000 per month (US$3.2), and Africa a skilled worker will earn an average of TZS 81,228 Ratio of pupils in vocational Tanzania 2.5 % (US$65).67 training out of 15-24 year Sub-Saharan olds 2.0 % Africa Informal training represents the most common since 58 Note: Ratios are calculated based on average of the period 2010- percent of skilled workers coming from informal 2012. Source: World Bank, Education Statistics & UN Data. apprenticeships, compared to 15 percent from formal vocational training and 15 percent in NGO non-formal Figure 17: Ratio of vocational student to all pupils in training. secondary education Tanzania and the sub-Sahara Africa, 2004-2013 The labour market’s demand-side is mainly guided by 14% the National Employment Policy (NEP). This promotes 12% employment creation initiatives and employment 10% growth. The policy has deficiencies in terms of the post- employment education and training system that lacks 8% guiding such skills development initiatives. 6% 4% Opportunities for vocational training in Zanzibar are limited. While enrolment in general education has 2% expanded rapidly within the last decade, technical and 0% vocational education has only experienced a limited 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 growth. There are few recognized institutions which Tanzania Sub-Saharan Africa offer this type of education/training in Zanzibar.68 Source: Source: World Bank, Education Statistics. Regarding statistics there are only outdated data.69 Formal vocational training is administered by the Vocational Education and Training Authority (VETA) of Tanzania, which runs training centres. Vocational SOCIAL PROTECTION training is also performed by technical colleges, religious training centres; private training centres and Tanzania, mainland70 through informal apprenticeships. The government There are seven social security funds supervised by the launched new specialized vocational training centers in Social Security Regulatory Authority. They registered a total membership growth from 1,274,000 in 2008 to

Tanzania and Zanzibar 2016 Page 20

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

2,142,000 in 2015. The two largest social insurance Figure 18: Total health-care expenditure not financed by funds offering health and medical coverage are: i) the private household's out-of-pocket payments East African countries, 1995-2011, % National Health Insurance Fund (NHIF) providing the 90% main access to health services, after the state tax- financed health programs; and ii) the National Social 80% Security Fund (NSSF). In 2014 NSSF had registered 600,000 members. 70%

60% The NHIF has expanded its active registered members from 164,708 in 2001 to 600,000 in 2014; and, 50% including dependents, a total of more than 1 million people were covered.71 Other estimations of health 40% social protection coverage is estimated at 13 1995 2000 2005 2006 2007 2008 2009 2010 2011 percentage of the total population, which is relatively Burundi Kenya Rwanda low in comparison with the Africa average that is Tanzania Uganda assessed at 25 percentages (see also Table 23). Source: ILO, Addressing the Global Health Crisis: Universal Health Protection Policies, 2014

Table 23: Public spending and coverage on social protection schemes in Tanzania, 2010, % This low social protection coverage is related to Indicator Measure % restrictive legislation which defines the personal scope Total social protection of coverage for each of the social security schemes in % of GDP 6.8 % expenditure Tanzania. In practice, this created hurdles that Public Health care complicate access to workers from the informal % of GDP 4.5 % expenditure economy. On the positive side, the Social Security Laws Amendment Act from 2012 extends coverage to the Health social protection % of total 13 % informal economy workers. This law is already inforce coverage population but the implementation has been silently stalled on Trends in government % change per -2.6 % account of workers being disgruntled because the law expenditure in health year (2007-2011) 72 Source: ILO, Social Protection, Statistics and indicators abolishes withdrawal benefits. Basically are workers from the informal economy not Overall are the social benefits for the active age in covered by any coordinated form of social security terms of the public social protection expenditure very schemes. Be that as it may, NSSF’s special scheme on low in Africa region at 0.4 percent of the GDP, but it is health insurance for members in the informal economy even extremely lower in Tanzania, which was estimated has shown positive impacts after registering over at 0.03 percent. Also in terms of the active contributors 70,000 members since its establishment.73 It is to a pension scheme in the working age (15-64 years) noteworthy to mention that there is no unemployment is also lower than the sub-Saharan Africa average, i.e. benefit scheme. 3.1 percent and 5.9 percent, respectively (Table 24). Reformed social security regulations have been in Table 24: Pension Schemes: Benefits, Coverage and progress. Many people are concerned about their rights Contributions, 2010, % and pension benefits, especially the probability of Social benefits for active age % of GDP 0.03 % social rights between the social security schemes and the Pensionable age receiving an Proportion right to withdraw pension funds before retirement age. 3.2 % old age pension (age 60+) of total The Government of Tanzania has reached huge arrears Active contributors to a pension in payments to the social security funds, which threatens 15+ 3.3 % scheme the whole social security system. Active contributors to a pension 15-64 years 3.1 % scheme The government is expanding the Tanzania Social Source: ILO, Social Protection, Statistics and indicators Action Fund conditional cash transfer program, which

demonstrated an increase in school enrollment and a The expenditure on health declined on -2.6 percent per decrease in child labor. year on average in the period 2007-2011 and the not out-of-pocket payment fell from 85 percent in 2009 to The government adopted the Arusha Declaration on 68 percent in 2011 (Figure 18). Social Protection in December 2014 which provides

Tanzania and Zanzibar 2016 Page 21

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

a foundation for advancing the agenda of social This has mainly been driven by several fast growing protection in Tanzania. sectors, such as construction, transport and financial services. Discovery of oil and gas reserves holds Zanzibar74 promises for the development of the extractive industry The Zanzibar Social Security Fund (ZSSF) is the only and for substantial contributions to the country’s public insurance scheme in Zanzibar. It provides old age economy. pension, life insurance, invalidity and maternity benefits. In 2011 ZSSF registered 61,396 employee members Table 25: Key Economic Facts in Tanzania, 2015 originating from 927 registered employers.75 It is a GDP Doing Human Gini contributory scheme with 10 percent of salary paid by GDP real Business Development Index*** growth 2016* Index** (2011) the employer and 5 percent by the employee. Pension 44.9 139 of 37.8 in Zanzibar is generally much lower than in mainland 151 of 188 billion 7.0 % 189 countries 76 of 145 Tanzania, at an average 3.5 times lower. Pay-out to US$ countries old age pensions has tended to be delayed, often for countries * A high ranking on the Ease of Doing Business Index means the 76 several years. By intervention from ZATUC this regulatory environment is more conducive to the start-up and operation of problem has been reduced. a local firm.78 ** The Human Development Index (HDI) measures the average of a long The National Health Insurance Fund (NHIF) is operating and healthy life, access to knowledge, and a decent standard of living. in Zanzibar providing the access to health services. *** A Gini coefficient of 1 (or 100 percent) expresses maximal inequality among values. This Gini Index ranks the first country with the highest There are also several non-contributory safety net inequality while the number 145 has the highest equality. programmes for vulnerable children, elderly and Source: CIA, The World Factbook, Tanzania, World Bank, World disabled. Zanzibar also has several funds for Zakat the Development Indicators; World Bank & IFC, Ease of Doing Business 2015/2016 in Tanzania; and UNDP, Human Development Index trends Islamic founded social welfare, for an amount equivalent to 2.5 percent of annual personal wealth. The GDP per capita growth in Tanzania has stayed much higher than the sub-Saharan Africa average In 2013 the ZSSF opened the issue of extending social during the last decade (Figure 19). The country is close security coverage to informal economy, which was to achieving the middle-income status. discussed for the first time in the islands’ history. A Social Security Law revision has been in the final Figure 19: GDP per capita growth, 2006-2015, % process. This also includes that the Government of 6 Zanzibar decided to introduce a universal social pension to be provided to all older people aged 70 5 years and above, starting from April 2016. This new universal pension is the first of its kind in east Africa. 4 Anyone over the age of 70 will receive a monthly non- 77 contributory pension of TZS 20,000 (US$9). ZATUC is 3 still concerned about compulsory transfers from social security to health schemes. By the same token, ZANEMA 2 has raised their attention to the increase of the contribution from 10% to 13% for the employers, 1 entitlements of the full benefit from 60 months to 156 months, among others. 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Tanzania Sub-Saharan Africa

ECONOMIC PERFORMANCE Source: World Bank, World Development Indicators

In the past two decades, Tanzania has experienced a However, the GDP per capita in Purchasing Power liberalized market economy transition as well as Parity (PPP) remains low and below the sub-Saharan political and social stability. There has been a solid Africa average; and ranked as 191 out of 229 economic growth in the last decade; estimated at 7.0 countries (Figure 20). percent in (Table 25).

Tanzania and Zanzibar 2016 Page 22

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Figure 20: GDP per capita (PPP) growth, Current US$; and These changes have also been reflected in the Gini Index increasing middle-class. Especially the lower middle- 4000 41 40,3 class (US$3.1-US$5 a day) increased fast from 5 40 percent in 2000 to 16 percent in 2012, but remains 3000 lower that the sub-Saharan Africa average. Also the 39 higher middle-class (US$5-US$13 a day) also grew, 2000 37,8 38 just staying below the sub-Saharan Africa average. The low middle-class remains economically vulnerable and 1000 37 could rapid drop below the US$3 per day (Figure 22).

0 36 Figure 22: Middle-class growth in Tanzania and the sub- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Gini Index - Tanzania Tanzania Saharan Africa, 2000-2012 Sub-Saharan Africa 20% Source: World Bank, World Development Indicators

Based on the distribution of income (Gini index) the 15% country has experienced a trend towards more equality (Table 25 & Figure 20). But taking the low GDP per capita (PPP) in account, the population is still relatively 10% poor. Tanzania has stepped up by two steps in the Human Development Index (HDI) in the period from 5% 2009 to 2014.

Other data show that Tanzania has experienced a 0% noteworthy reduction of the working poor. In the share 2000 2007 2012 of extreme working poor (US$1.9 a day) in total Middle-class US$3.1-US$5 (Tanzania) Middle-class US$5-US$13 (Tanzania) Middle-class US$3.1-US$ (SSA) Middle-class US$5-US$13 (SSA) employment, it fell fast from 82 percent in 2000 to 42 Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition percent in 2012. This rate remains higher than the sub- Saharan Africa average, but getting closer to it. Inflation in consumer prices used to be low, but during Equally important the working poor (US$3.1 a day) the last decade it became volatile; peaking at 16 also decreased, but a slightly lower rate from 89 percent in 2012 due to rising oil prices, monetary percent in 2000 to 73 percent in 2012. This latter trend expansion and mounting food prices. This also affected also remains higher than the sub-Saharan Africa real wages purchasing power. The inflation returned to average (Figure 21). one-digit since 2013 and has remained steady at around 6 percent, largely due to the stability of food Figure 21: Working poor, 2000-2012, % and energy prices on international markets (Figure 23). 100% Figure 23: Inflation trend, 2006-2015, % 90% 18

80% 16

70% 14

12 60% 10 50% 8

40% 6

30% 4 2000 2007 2012 2 Tanzania - US$1.9 per day Tanzania - US$3.1 per day SSA- US$1.9 per day SSA - US$3.1 per day 0 Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Tanzania Sub-Saharan Africa Source: World Bank, World Development Indicators

Tanzania and Zanzibar 2016 Page 23

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

There is a significant high level of capital formation in Topics 2016 2015 Change Tanzania in comparison with the sub-Saharan Africa average (Figure 24). The trend is related to growing Trading Across Borders 180 181 1 capital inflows from the private sector that goes Enforcing Contracts 64 64 No change towards the industrialization process, and a lower proportion from development aid. Resolving Insolvency 99 98 -1 Note: Doing Business 2016 indicators are ranking from 1 (top) to 189 Figure 24: Gross Fixed Capital Formation, 2006-2015, % of (bottom) among other countries. The rankings tell much about the GDP business environment, but do not measure all aspects of the business 40 surroundings that matter to firms and investors that affect the competitiveness of the economy. Still, a high ranking does mean that the 35 government has created a regulatory environment conducive to 30 operating a business. Note: This Index has been controversial due to flawed data, especially in 25 terms of labour market flexibility and undervalued paying taxes. However, the table can still be used as indicative measurement with 20 reservations.79 15 Source: World Bank & IFC, Doing Business 2016, Economy Profile: Tanzania 10 5 Tanzania's tax system revenues have rapidly grown, but remains with insufficient finance to cover the public 0 sector demand. Roughly 450 big firms cover 70 percent 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Tanzania Sub-Saharan Africa of the country's income tax. A challenge authority’s face Source: World Bank, World Development Indicators is the non-existent system to identify tax contributors of their citizens. An additional burden is that the informal The doing business environment in Tanzania has not economy retains most workers, making it harder to experienced many improvements since last year. Said collect tax payments from small-medium enterprises differently, eight of the ten Doing Business indicators (SMEs) did not demonstrate improvements (Table 26). The country was indexed at 139 out of 189 countries in Overall, Tanzania continues to enjoy a stable and 2016. The country’s ranking remains slightly better than democratic government. In the light of the governance the sub-Saharan Africa average ranking, though. milieu, the country has experienced declining trends on five out of six of the Governance Indicators. Especially This modest increase in Tanzania is related to has the political stability and control of corruption improvements of dealing with construction permits. declined, but also government effectiveness has Endorsing contracts as well as getting electricity have underachieved. Only has there been registered some the highest rankings, 64 and 83 out of 189 countries, improvements on regulatory quality (Table 27). respectively. Trading across borders (180), getting credit (152), and paying taxes (150) are the most Table 27: Tanzania's Governance Indicators, 2009-2014 underperforming indicators. Voice and Government Year Political Stability Accountability Effectiveness Table 26: Ease of Doing Business in Tanzania 2009 -0.16 / 44% 0.07 / 48% -0.59 / 34%

2014 -0.17 / 42% -0.54 / 27% -0.64 / 27% Topics 2016 2015 Change Regulatory Control of Year Rule of Law Quality Corruption Starting a Business 129 122 -7 2009 -0.42 / 36% -0.48 / 39% -0.44 / 39%

Dealing with Construction Permits 126 147 21 2014 -0.34 / 41% -0.41 / 39% -0.80 / 23%

Getting Electricity 82 83 No change Note: The Governance Indicators score from ‐2.5 to 2.5 while the percentiles rank from 0 (lowest) to 100 (highest).80 Source: World Bank, Worldwide Governance Indicators, 2004-2014 Registering Property 133 132 -1

Getting Credit 152 150 -2

Protecting Minority Investors 122 121 -1

Paying Taxes 150 147 -3

Tanzania and Zanzibar 2016 Page 24

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

TRADE The largest contributor to the export basket continues to The growth of the export on average in Tanzania has be primary commodities, particularly gold, metal ore, basically stayed flat during the last decade reaching tobacco, and coffee (Figure 26). The volume of 21 percent of GDP in 2015. The export is far below manufactured exports is also up surging.82 The the sub-Saharan Africa average. The import has been development of the extraction sector will likely continue more volatile dropping down from 36 percent in 2001 through gas exportation. to 29 percent in 2015; it also dropped below the sub- Saharan Africa average. The import in Tanzania is Figure 26: Tanzania's main products share of mainly due to imports of capital and a rapid increase in exports, 2014 consumption, particularly of vehicles and fuel. This has not been matched by the development of productive sectors. It is basically the mining that is able to keep up Gold; 21% with the growth in imports. Stated differently, a significant trade deficit is present in the country, and keeping this balance of trade with a deficit at around Precious Others; 49% Metal Ore; 11 percent of GDP on average during the last decade 5,7% (Table 28 & Figure 25). Raw Tobacco; 6,3% The growth of foreign direct investment (FDI) has been slightly higher than the sub-Saharan Africa average in Palm oil; Coconuts, Copper3,2% Ore; recent years. Oil and gas exploration activities will Brazil Nuts, 3,8% continue to attract private capital in the country, and and Other Oily Cashews; Fish; 2,8% Seeds; 4,4% net inflow of FDI is expected to remain strong.81 3,7% Source: MIT, The Observatory of Economic complexity, Tanzania

Table 28: Trade and Foreign Direct Investment in Tanzania, 2015 The European Union (EU-28), China and India are the main importers of Tanzania’s goods (Figure 27). Exports Imports FDI flow FDI Stock

9.3 12.9 2.0 18.5 Figure 27: Tanzania's main export markets, 2015 billion US$ billion US$ billion US$ billion US$ 21 % of 29 % of 4.4 % of 41 % of GDP GDP GDP GDP EU 28; Source: World Bank, World Development Indicators & Santander, 17% Tanzania: Foreign Investment, FDI in figures

Figure 25: Export, Import and Foreign Direct Investment Others; (FDI) trends China; 8% 41% Tanzania and the sub-Saharan Africa (SSA), 2006-2015 45

40 India; 21%

35

30

25 Kenya; 5% U.A.Emirat Japan; es; 4% 5% 20 Source: European Commission, DG TRADE, Bilateral Relations, Statistics 15 10 Trade Agreements 5 Tanzania is part of the East African Community (EAC). 0 The EAC free trade agreement from 1999 contains a 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 labour provision with cooperation on employment and Export - Tanzania Import - Tanzania working conditions with an emphasis on gender equality FDI - Tanzania Export - SSA and discriminatory law and practices. Likewise, the Import - SSA FDI - SSA labour provision of the Common Market for Eastern and Source: World Bank, World Development Indicators

Tanzania and Zanzibar 2016 Page 25

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Southern Africa (COMESA) agreement extends to markets, but the participation of Tanzanian investors in cooperation on employment conditions and labour other EAC markets is a maximum of 0.5 percent, which law.83 Tanzania is also part of the 2000 Cotonou is very low.85 Agreement between the European Union (EU) and African, Caribbean and Pacific (ACP) countries, which Through the EAC, Tanzania is allowed to export duty reaffirms commitment to ILO’s Fundamental Conventions and quota free to the European Union (EU) since 2008, and includes a labour provision on cooperation on and will have to gradually remove duties and quotas various labour and social issues. on EU exports to Tanzania on most products, except the products deemed to need protection from EU exports. In 2005 the EAC established a customs union and in These include agricultural products, wines and spirits, 2010 the EAC agreed to establish full common market chemicals, plastics, wood based paper, textiles and with free movement for workers, goods, services and clothing. Negotiations on Economic Partnership capital. Agreement (CPA) between the EAC and the EU were long last concluded in late 2014, securing continued Freedom of association and collective bargaining is free access to the European markets. However, in July enshrined in the EAC common market in the sense that 2016 Tanzania decided to halt signing the agreement an EAC migrant worker has equal rights as a national.84 due to the uncertainties in the aftermath of the Britain’s The free movement of labour within the EAC opens up exit of the EU. questions of how to achieve equal opportunities and equal social and labour rights for migrant workers, for Since 2001 Tanzania has benefitted from the United example if workers can bring pensions with them across States’ African Growth and Opportunity Act (AGOA), borders. The free movement of labour is also a source which is a Generalised System of Preferences. It allows of concern in some of the EAC countries, as the countries duty and quota free access for some products. workforces have differences in productivity and Tanzania can be removed from AGOA, if the United educational level. However, the actual implementation States deems that Tanzania among other human rights of the economic integration have slowed down the last issues, do not seek to uphold the ILO Core Labour few years especially with regards to lifting barriers to Standards and have acceptable minimum wages, hours trade and free movement of labour. Although formal of work and occupational safety and health. tariffs are increasing abolished, trade is still challenged by non-tariff barriers and corruption. Export Processing Zones (EPZ) The EPZ and Special Economic Zone (SEZ) programs in The objective of the East African trade union movement Tanzania were established in 2002 and have been is to safeguard workers’ interests in the EAC. They aim under significant expansion (Figure 28). to ensure that ILO standards are upheld and member states’ labour policies are harmonized and the tripartite Figure 28: Number of Zone Developers and Operators model is institutionalized, while the free movement of since established of EPZA, 2006-2010 labour is promoted. The trade union movement has 40 reached observer status in the EAC in 2009, and along 35 35 with employers’ organizations they participate in 30 ministerial summits, sectoral summits, and other summits 28 25 24 that involve labour market issues. However, no meetings 20 were conducted in the Council of Ministers responsible 18 18 of Labour since 2009/2010 and implementation of the 15 15 EAC Common Market Protocol is moving very slowly 10 10 5 5 34 In terms of regional trade integration, Tanzania’s legal 0 services and accounting/auditing services tend to be 2006 2007 2008 2009 2010 Zone Developers Operators very regulated and restricted. Moreover, the country does not allow foreign participation in initial public Source: EPZA, EPZ & SEZ Programs in Tanzania, May 2010 offerings (IPOs). Sale or issue of shares by foreigners is There are 25 EPZ with 70 manufacturing industries not restricted. Institutional investors, national pension whereby about 15 companies have applied for funds, fund management firms, and insurance companies establishment of industries in different areas in the usually dominate participation in EAC stock and bond country. These EPZ has created around 36,000 direct

Tanzania and Zanzibar 2016 Page 26

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

employment, and at least 120,000 indirect ones;86 and fiscal losses in terms of huge tax exemptions extending contributing with 5 percent of national exports. The over up to 10 years.87 The EPZ program also face a industries operate in machinery, processing of food and number of other challenges: High cost of operations and of minerals. production due to unreliable supply of electricity and water made the EPZ operating enterprises A study concluded that Tanzania’s EPZ program is uncompetitive in the international markets.88 lagging behind, mainly due to the rigid and expensive infrastructural issues. While EPZ firms have been There are two EPZs on Zanzibar, where there previously enjoying fiscal incentives, the government has not been have been unconfirmed reports of trade union rights reaping benefits from the scheme as well as borne violations.

Tanzania and Zanzibar 2016 Page 27

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

APPENDIX: ADDITIONAL DATA

Table 29: Status of Tanzania’s Ratified ILO Conventions, 2016 Ratification Subject and/or right Convention date Fundamental Conventions Freedom of association C087 - Freedom of Association and Protection of the Right to Organise, 1948 2000 and collective bargaining C098 - Right to Organise and Collective Bargaining Convention, 1949 1962 Elimination of all forms C029 - Forced Labour Convention, 1930 1962 of forced labour C105 - Abolition of Forced Labour Convention, 1957 1962 Effective abolition of C138 - Minimum Age Convention, 1973 1998 child labour C182 - Worst Forms of Child Labour Convention, 1999 2001 Elimination of discri- C100 - Equal Remuneration Convention, 1951 2002 mination in employment C111 - Discrimination (Employment and Occupation) Convention, 1958 2002 Governance Conventions C081 - Labour Inspection Convention, 1947 Not ratified Labour inspection C129 - Labour Inspection (Agriculture) Convention, 1969 Not ratified Employment policy C122 - Employment Policy Convention, 1964 Not ratified Tripartism C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 1983 Up-to-date Conventions C094 - Labour Clauses (Public Contracts) Convention, 1949 1962 Wages C095 - Protection of Wages Convention, 1949 1962 C131 - Minimum Wage Fixing Convention, 1970 1983 C135 - Workers’ Representatives Convention, 1971 1983 Industrial relations C154 - Collective Bargaining Convention, 1981 1998 Vocational guidance and C140 - Paid Educational Leave Convention 1983 training C142 - Human Resources Development Convention 1983 Occupational Safety and C148 - Working Environment (Air Pollution, Noise and Vibration), 1977 1983 Health C170 - Chemicals Convention, 1990 1999 Specific categories of C149 - Nursing Personnel Convention, 1977 1983 workers Dockworkers C152 - Occupational Safety and Health (Dock Work) Convention, 1979 1983 Note: Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to basic human rights at work. Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market. In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes. Source: ILO, NORMLEX

Tanzania and Zanzibar 2016 Page 28

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Table 30: Status of Trade Unions in Tanzania, 2016

Estimated Workers No. of OHS Total Women No. of Trade Unions potential covered by Committees Members Members CBAs members CBAs at workplaces Affiliated to TUCTA CHODAWU - Conservation, Hotel Domestic and Allied Workers 39,666 10,976 11,479 35 N/A 7 Union COTWU - Communication Transport Workers Union of 6,043 1,301 6,180 15 1,703 4 Tanzania TTU - Tanzania Teachers Union/ 265,921 111,641 46,770 1 266,039 0 Chama cha Waalimu Tanzania DOWUTA - Dock Workers Union 3,865 - 325 2 3,810 1 of Tanzania RAAWU - Researchers, Academician and Allied Workers 12,437 4,468 2,864 4 N/A 2 Union TALGWU - Tanzania Local 0 59,903 32,145 - 1 N/A Government Workers Union TAMICO - Tanzania Mines, Energy and Construction Workers 12,071 1,421 17,820 10 18,765 10 Union TEWUTA - Telecommunication 1,593 631 6,439 3 1,627 2 Workers Union of Tanzania TPAWU - Tanzania Plantation 47,861 16,769 20,580 198 N/A 25 and Agricultural Workers Union TRAWU - Tanzania Railways 3,540 391 478 2 3568 0 Workers Union TUGHE - Trade Union of 66,038 26,973 29,366 5 300 2 Government and Health Workers TUICO - Tanzania Union of Industrial and Commercial 73,122 27,192 22,500 31 35,438 345 Workers * Not affiliated to TUCTA TASU - Tanzania Seafarers 841 40 640 3 741 0 Union TFCAWU - Tanzania Fishing 2,400 - - - - - Crew and Allied Workers’ Union TUJ - Tanzania Union of 150 - - - - - Journalists TAFIMU 573 - - - - -

IGWUTA 676 - - - - -

TASIWU 2,851 - - - - -

TUPSE 1,102 - - - - -

MPETU 303 - - - - -

FIBUCA 4,508 - - - - -

PRIPPAWUTA 361 - - - - -

NUMET 1,182 - - - - - * Data of TUICO’s total and women union membership are from June 2015. Note: An addition eight trade unions are not affiliated with TUCTA, but lack data of members. These following trade unions are: TMW, TPU, TAWU, THTU, TARWOTU, TMDPWU, DOSHITWA, and TAWUTA.89 Source: TUCTA and LO/FTF Council research.

Tanzania and Zanzibar 2016 Page 29

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

Table 31: Trade Union Centre and affiliates in Zanzibar, 2016 No. of OSH Workers Total Female No. of committees Trade unions covered Members Members CBAs at by CBAs workplaces ZATUC - The Zanzibar Trade Union Congress 19,959 7,397 7 3,300 24

COTWU-ZNZ - Zanzibar Communication and Transport 1,125 329 1 720 4 Workers’ Union ZASU - Zanzibar Seafarers Union 3,920 3 - - 1 TUICO-Z - Zanzibar Union of Industrial and commercial 984 393 2 335 - Workers ZUPHE - Zanzibar Union for Public and Health employees 2,257 1,207 - - 12 CHODAWU-Z - Zanzibar Conservation, Hotel, Domestic 1,739 3 1,900 - and Allied Workers’ Union 688 ZATU - Zanzibar Teachers’ Union 5,833 3,347 - - - ZAFICOWU - Zanzibar Financial and Commercial Workers 551 1 55 - Union 291 TEWUTA-Z - Zanzibar Telecommunication Workers Union 336 76 - - 1 ZAPSWU - Zanzibar Public sector Workers Union 3,214 1,063 1 345 6 Source: ZATUC and LO/FTF Council research.

Tanzania and Zanzibar 2016 Page 30

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

REFERENCES

38 National Bureau of Statistics, 2014 Integrated Labour 1 U.S. Department of State, Annual Country Report on Human Force Survey (ILFS), 2015 Rights Practices, 2014 39 AEO, Tanzania 2014 2 Zanzibar 2012 Census 40 Labour Market Information System, Employment situation in 3 http://www.ate.or.tz Zanzibar 4 East African Business Week, Regional trade unions want 41 The Economist, The Swahili coast: Contagion of discontent, common work permit formula, May 5, 2014 Nov 3rd 2012 5 ILO, Labour Administration and Labour Inspection, 42 ALLAFRICA, TANZANIA: UNEMPLOYMENT IN ZANZIBAR A Information resources, Tanzania TICKING TIME BOMB, 23 SEPTEMBER, 2008 6 ILO, LAB/ADMIN, Technical Memorandum: Tanzania, 2010 43 ILO, Vulnerable employment and poverty on the rise, 7 ILO, LAB/ADMIN, Technical Memorandum: Tanzania, 2010 Interview with ILO chief of Employment Trends Unit 8 ILO, LAB/ADMIN, Technical Memorandum: Tanzania, 2010 44 World Bank, Tanzania - Productive jobs wanted (Vol. 1 of 9 ILO, LAB/ADMIN, Technical Memorandum: Tanzania, 2010 2) : Executive summary, 2014 & U.S. Department of State, Annual Country Report on Human 45 World Bank, De-fragmenting Africa: Deepening Regional Rights Practices, 2013 Trade Integration in Goods and Services, 2012 10 Janna Besamusca & Kea Tijdens, Comparing 46 Africa Investments, Labour Force Profile, Tanzania Business collective bargaining agreements for developing Sector Support - Programme Phase III - BSPS III 2008-2014, countries, 2015 2014 47 11 LO/FTF Council IOM, Activities, Facts and Figure, Tanzania 48 12 Labour Relations Act 2005 (Act No. 1 of 2005), Part X The National Bureau of Statistics, 2014 Integrated Labour Zanzibar Industrial Court Force Survey (ILFS), 2015 49 13 ILO, LAB/ADMIN, Technical Memorandum: Tanzania, 2010 WageIndicator, Data Report, Wages in Tanzania, 14 ALLAFRICA, Tanzania: Shein Calls for Improved Justice for WageIndicator survey 2012 All in Isles, February 11, 2015 50 WageIndicator, Data Report, Wages in Zanzibar, 15 U.S. Department of State, Annual Country Report on Human WageIndicator survey 2013 Rights Practices, 2015 51 ILO, Transitioning from the informal to the formal economy, 16 The Employment Act 2005 (Act No. 2 of 2005), Part IV Report V (1), International Establishment of the Labour Advisory Board Labour Conference 103rd Session 2014 52 17 ILO, NATLEX, The Constitution of the United Republic of Ministry of Labour, The National Employment Policy Tanzania 53 U.S. Department of Labor, 2014 Findings on the Worst 18 ILO, NATLEX, Employment and Labour Relations Act, 2004 Forms of Child Labor, Tanzania (No. 6 of 2004) 54 U.S. Department of State, Annual Country Report on Human 19 ILO, NATLEX, Public Service (Negotiating Machinery) Act Rights Practices, 2015 2003 (No. 19 of 2003) 55 TANZANIA TODAY, Future Policy Award 2015: Gold goes 20 ILO, NATLEX, Labour Institutions Act (No. 7 of 2004) to Zanzibar’s Children’s Act 56 21 Legal and Human Rights Centre, Human Rights and Business ITUC, Trade unions take action on HIV orphans and child Report in Tanzania 2013 labour, September 29, 2012 57 22 ILO, NATLEX, Labour Act, 1997 (No. 3 of 1997) ILO, National Report for Promoting the Linkages between 23 ILO, NATLEX, Country Profile Tanzania, Basic Laws Women’s Employment and the Reduction of Child Labour 58 24 ITUC, Survey of violations of trade union rights, Tanzania EATUC, Gender Stategy , 2011 59 25 ILO, NATLEX, Country Profile, Ratifications for Tanzania U.S. Department of State, Annual Country Report on Human 26 ILO, NORMLEX, Observations made by employers' and Rights Practices, 2015 workers' organizations of United Republic of Tanzania, Article 22, 60 ILO, Labour market transitions of young women and 2015 men in the United Republic of Tanzania, Work4Youth 27 ITUC, Survey of violations of trade union rights, Tanzania Publication Series No. 26, December 2014 61 28 U.S. Department of State, Annual Country Report on Human Africa Investments, Labour Force Profile, Tanzania Business Rights Practices, 2015 Sector Support - Programme Phase III - BSPS III 2008-2014, 29 ILO, NORMLEX, Country Profile: Tanzania & Zanzibar 2014 62 30 DW, MINIMUM WAGES IN AFRICA, NOT A CURE-ALL FOR International Youth Foundation, YouthMap: Tanzania, POVERTY, 8 OCTOBER, 2013 Zanzibar Youth: Assets & opportunities, Assessment Report, 31 ILO, Decent Work Country Programme (2006-2010) 2014 32 Tanzania National Bureau of Statistics, Formal Sector EES 63 World Bank, How Tanzania Plans To Achieve "Big Results 2014 Tanzania Mainland, 2015 Now" in Education, July 14, 2014 33 U.S. Department of State, Annual Country Report on Human 64 ALLAFRICA, Tanzania: Govt Set to Establish Specialised Rights Practices, 2014 Vocational Centres, July 5, 2016 34 ILO, Press Release, ILO calls for strengthening labour 65 World Bank, World Development Indicators inspection worldwide, 16 November 2006 66 Association of Tanzania Employers, Business Agenda 2011- 35 U.S. Department of State, Annual Country Report on Human 2014 Rights Practices, 2015 67 ILO, EMPLOYMENT, 2009, Understanding informal 36 DEVEX, How data could help Tanzania's young informal apprenticeship – Findings from empirical research in workers, March 17, 2015 Tanzania, Employment Working Paper No. 32 37 National Bureau of Statistics, 2014 Integrated Labour 68 Revolutional Government of Zanzibar, Ministry of Education Force Survey (ILFS), 2015 and Vocational Training; Technical Education, Vocational Education & Training

Tanzania and Zanzibar 2016 Page 31

Danish Trade Council for International Development and Cooperation Labour Market Profile 2016

69 ILO, Social Protection Expenditure and Performance Review and Social Budget: Zanzibar, 2010 & Ministry of Education and Vocational training 70 ILO, Tanzania Mainland, Social Protection Expenditure and Performance Review and Social Budget 71 NHIF, Fact Sheet Inside NHIF 2012-13 72 Tulia Ackson & Juliana Masabo, Social Protection for the Informal Sector in Tanzania 73 AllAfrica, Tanzania: Over 70,000 Register in NSSF Health Insurance, August 7, 2015 74 ILO, Zanzibar, Social Protection Expenditure and Performance Review and Social Budget 75 ZSSF, Annual Report 2010-2011 76 LO/FTF Council 77 Help Age, Zanzibar's new universal pension the first of its kind in east Africa, April 14, 2016 78 World Bank & IFC, Doing Business, Methodology 79 ITUC, WORLD BANK’S DOING BUSINESS MAKES UNSUBSTANTIATED ASSERTIONS, REWARDS COUNTRIES THAT HAVE NOT RATIFIED ILO CONVENTIONS, SEPTEMBER 10, 2008 & ILO, DEREGULATION LABOUR MARKETS: HOW ROBUST IS THE ANALYSIS OF RECENT IMF WORKING PAPERS?, CONDITIONS OF WORK AND EMPLOYMENT SERIES NO. 47, 2014 80 World Bank, The Worldwide Governance Indicators, Methodology and Analytical Issues, Policy Research Working Paper 5430, 2010 81 African Economic Outlook, Tanzania 2015 82 World Bank, Tanzania Overview 83 Ebert & Posthuma, ILO, IILS, 2010, Labour provisions in trade agreements: current trends and provisions 84 EAC, Annex on the Free Movement of Workers, November 2009 85 World Bank, De-fragmenting Africa: Deepening Regional Trade Integration in Goods and Services, 2012 86 EPZA, EPZA’s push toward industrial development a plus in Tanzania’s economic endeavors & Daily News, EPZA generates 2tri/- in forex, April 14, 2016 87 Charles Domician, An Evaluation of Tanzania’s EPZ Programme – Challenges and Prospects, August 2009 88 EPZA, Annual Report 2011-2012 89 Africa Investments, Labour Force Profile, Tanzania Business Sector Support - Programme Phase III - BSPS III 2008-2014, 2014

Tanzania and Zanzibar 2016 Page 32